MYGN - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics First Quarter 2019 Financial Earnings Conference Call.

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

As a reminder, this conference is being recorded, Tuesday, November 6, 2018. to Relations conference for like Gleason, to now Investor VP, Myriad would turn over the Scott I Genetic Laboratories. ahead. go Please

Scott Gleason

Thanks, I'm the to welcome of Investor quarter My afternoon, Corporate Genetics SVP is Good Strategy. and name and first call. XXXX the Gleason, Scott Relations fiscal earnings Tina. Myriad and

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

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

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

Mark C. Capone

I exceeded highlights regarding Scott. the quarter, guidance, from Revenue XX%. year. and revenue call the first XX% our This today's expectations at per more financial and earnings start On Riggsbee expectations were details of million will and detailed accomplishments $X.XX XX% provide results providing at revenue a share. of $XXX.X key a per our first grew over represents last significantly business of I quarter. after and share, call by the Thanks, to which earnings an which will would organic our $X.XX growth overview met quarter growth basis, during increase an the and Bryan like earnings the basis X% year-over-year in a by providing represents per acquisition, look adjusted excluding share finish at on Counsyl

As financial late transitory, as XXXX issues for fiscal profitability, We the guidance result given Bryan progress earnings two we guidance GeneSight will in and unchanged. for testing, a section and of the for to $XXX call, issues we remains that discuss in $XXX revenue the quarter to view fiscal as have million. revenue prenatal impacted million revised the and identified the these on year

volumes, acquisition, coverage to this new decisions. there as synergies continue continue and upside Counsyl We to additional multiple are potential realize grow product from secure to believe drivers the we revised product guidance new

foundation. factors highlight our want quarterly to For strong hereditary summary, to success cancer our progress objective the maintain with a critical I on starting

revenue is on This a hereditary our exceeded which year-over-year cancer unfavorable relatively pricing comparable. flat basis, expectations the quarter given

was stable quarter implemented cancer of strong the Therefore, performance the with quarter riskScore our second in contracts fully cancer key pricing, in reminder, long-term family growth. we first for a with hereditary in given that testing and a we for double-digit patients As histories. in reductions less XXXX. volume revenue the contributor qualify in saw hereditary growth the fiscal as quarter are severe pricing year-over-year well-positioned were the year-over-year year-over-year

these only XX% testing but XX% of reminder, historical market hereditary cancer comprise our patients a of the volume. As

the This companion quarter there diagnostic were significant advancements BRACAnalysis in CDx portfolio.

breast Pfizer we collaborate and into inhibitor, promotion a cancer Pfizer's First, PARP experienced commercialization with growth strong second in our volume a we the metastatic diagnostic entrance BRACAnalysis patients to metastatic FDA Myriad population. CDx believe could this with Pfizer for accelerate we breast testing cancer approval patient further for testing, as on in the TALZENNA. agreement received signed market and of in companion

we for addition, negative breast research Pfizer cancer. announced collaboration with triple neo-adjuvant In the

companion cancer Finally, negative CDx clinical BRACAnalysis year. metastatic diagnostic we upon test strong conjunction in in maintenance use AstraZeneca's filed In a which first-line rationale ovarian now total, triple breast for to a for patients per almost ovarian, physicians for and for for XXX,XXX breast supplementary provides a indications tests diagnosis. with potential the represent cancer LYNPARZA PMA cancer

prenatal half to perform set new XX% another ordering GeneSight revenue. at represent grow volumes physicians product remain for XX% records and the and good exceptionally synergies well, year. X,XXX we once relative XXX,XXX quarter again record with of test we in significant volume cost factor targeted prenatal perspective, led product the from new reimbursed which than level of diversification. double-digit would than saw with XX% an volume and the average with the the represents of fiscal in ordering integration million physicians. the success is growth fiscal with quarter. XXXX. we revenue to once tests greater is critical selling second and new price, XX,XXX year-over-year first greater impressive way first second the this products, The again increasing growth Fully Our about From volume Including test, saw $XXX a our in volume, organic new opportunity for GeneSight organizations two optimistic progressing we growth total total and

to product efforts new increase discuss reimbursement. our like to Next, I would

the the quarter. we landmark For anticipating by end acceptance of second the GeneSight, are of fiscal publication GUIDED

process, publication the the need this At to a anticipated delayed was to because a journal notified had condition review the end the journal. first the we was be disclosed. it GeneSight would earlier, that publication, proprietary algorithm and manuscript of withdrawn submitted of While as the company second

based was the second to Solely withdrawn and intellectual the property, we our quarter. the desire manuscript journal, submitted anticipating upon in to and another protect are acceptance

months, the to the commercial operating for day the XX-year significant procedures, dossier manuscript these standard technical to care dossier in representing of history. XX GeneSight acceptance, next of We but are the requesting strongest On expedited payers the and to the sent will the savings impact assessments payers performed and sometime be is GeneSight patient assessments their within our given both associated XX% cost assessment believe with we According be organizations strong will lives. technical customers. technical

acceptance, primary expand addition, studies In care will physicians. send access upon supported the a request reconsideration to to we to Medicare and IMPACT GUIDED by

a alone. these draft Medicare coverage in XX% we fiscal Noridian for received Melanoma that the If quarter approximately and XXXX. upon begin test. histopathology patients quarter This We indeterminate generating are local the of from estimate of revenue myPath are based each Melanoma myPath fourth XXX,XXX determination for performed year biopsies could finalized, skin

decision issued adds about X lives. expanded Guidelines received California, we commercial Prolaris, XX% for patients. recently seven With coverage Blue a are Shield incremental which in we favorable are In commercial have coverage of fiscal from of and from also positive prostate million received if medical XXXX. payers We optimistic coverage covered commercial aggregate, coverage NCCN reimbursement cancer now

by Moving City be on to end the our transitioned Lake year track are calendar international restructuring tests developed on to efforts XXXX. Salt will business, the and laboratory of

the for or end and are potential United National NICE, addition, product in Excellence, clinic. In by a a in calendar are document Health for we anticipating the late-stage with Kingdom buyer we guidance German from the discussions for perspective, year EndoPredict. final XXXX Care the of From a Institute

market. patients approved CDx and is Additionally, cancer per the launch our we separate cancer for approved, Japan companion represents and test diagnostic market and metastatic success diagnostic hereditary ovarian BRACAnalysis Myriad's year cancer hereditary a seen test the breast indication BRACAnalysis have with the hereditary million be would only If companion filed Japan patients. in application XX,XXX for breast in regulatory have BRACAnalysis cancer. X.X currently meaningful in in of Japanese testing The

laboratory Elevate Finally, operating process already the has adjusted profit improvements XXXX quarters million quarterly XXXX. greater program declining the goal five expenses quarter the in than a announce on the and after mostly cost program. led This to first has XXX-basis-point is annual margins. were exceeded The initiated with a of $XX achievement I'm in to attributed the remarkable initiated we fiscal our $XX only quarter organic to pleased since fourth savings million improvement organic incremental

summary, to fiscal synergies, with momentum we making have company, confident transitory Additionally, that multiple plan the throughout the our surfaced and additional improve materially will which we to In XXXX quarter. we Counsyl our progress the continue strategic excellent cost exit issues despite will fiscal that in including structure. first XXXX, projects, are I'm significant transform on

is by guidelines. companion testing Our bolstered significant and with foundation opportunities new we are and year-over-year hereditary to growth prospects cancer positioned to return expanded strong, diagnostic

materially for this full additional cost year. of expect fiscal Melanoma the the by end And we Also, program revenue projects all year. the synergies XXXX this addition, our In of the Prolaris, in fiscal exceeded has we and significant for the important advance are integration positioned provide second Counsyl with the reimbursement finally, Elevate to implementation of half year. expectations to GeneSight, slated myPath and

Now, call I would to like Bryan. turn the over to

R. Bryan Riggsbee

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

were up period same reported the prior revenues First we of compared in $XXX.X $XXX.X quarter to in million the total million the XX%, year.

reminder, impact XXX to results historical adjusted year the of XXXX fiscal As revenues. our our been accounting a ASC financial on have for reflect

related Psychiatric the trends weakest experienced the quarter Medicare continuing the by changes on presentation we the in Despite the $XX.X ordering and year-over-year was $XXX.X strong and sequential XX% seven year in quarters. year was of been a for volume million over physician consecutive and data American Medicare strong attestation GeneSight the lagged Meeting additional basis form. revenue was volume four in our quarter. at cancer revenue we stable revenue quarter August, quarter sequentially the predominantly the the has million obtain documentation in documentation to last criteria quarter to on grown year for seasonally Once a Notably, million following year. May. request the the basis again, of first grew and in XXXX. flat, in a that X% relatively $XXX due only saw X% this quarter over in and growth, strong we quarters requirements. growth record GUIDED Late Association fiscal Volume of DSM-X up down consecutive physicians year Hereditary on to in implemented test to was requested change pricing quarter compared has

were there changes for the Importantly, itself, indications documentation supporting merely LCD use. the the no to but

While compliance. with quarters we are documentation a meet we to will are to without would actively working then, Until be physicians few for achieve not submitted new this assuming it reimbursement. samples take requirements, these

continues reduction in the patients, Medicaid we and commercial Revenue Additionally, with quarter yet some XX% prenatal selling volume seen not which comprise growth year. and or the our in from price over testing year to market have was fully are shift towards as contracted of reimbursed. million volume average mix XX% $XX.X

revenue. included As only reflects hereditary excludes which hereditary months cancer overall is a the reminder, and cancer company's in prenatal revenue our the two test Reliant

For was basis. $XX million, flat the revenue year-over-year full on which a quarter, was approximately relatively total Counsyl

primarily lower network saw due While out with we volume expectations, was prenatal than expected the of revenue growth in-line status. to our UnitedHealthcare

network fourth prenatal late claims was As Vectra was $XX $XX last reducing margins. adjudicated first of in reminder, to not on on until the gross July million, so of in moderated of negatively the a test reimbursement of the placed were due growth September. impact bulk focused in million Revenue the the revenue was in out a testing year. quarter to compared quarter program number impacting was fiscal apparent

fiscal reimbursement our quarter in first which as growing $X.X initiative, double-digit quarter a quarter first to was occurred well and in by was continue now the year a revenue at and fiscal coverage EndoPredict million of operation year. revenue to recent Autoimmune quarter decisions U.S. and the relative volumes first XXXX. As profitable. first million, from Growth Myriad market, revenue of of patients, in the Medicare's increasing quarter of aided up revenues the grow Prolaris $X.X markets. favorable result XX% coverage this was and intermediate business EndoPredict in improvements meaningfully Prolaris over XX% reflective were the in international growth year. in lab the last adoption growth of commercial and was as rate fiscal is restructuring, unit

Lastly, I Once revenue discuss continued associated metrics an our from reduced organic business RBM clinical we margins business saw and financial compared with XX.X%, Myriad for year. strength at partners. gross with gross pharmaceutical like DNA, unit quarter. our robust in now basis, grew laboratories pharmaceutical year again, would and On $XX.X was Counsyl, that our a last Adjusted million XX% activity clinical services the our to meaningfully year. our to our trial to first RNA margins year increased quarter year in were over reagent fiscal the protein initiatives XX.X% costs. of and due excluding over

anticipate We and the expect International second quarter. by as continued fiscal Vectra completion of the laboratory we end the efficiency improvements relocation of

the $XX XXXX year-over-year this was reflects decline per Adjusted our to the of expense compared in research operating significant slightly This share $X.XX quarter the XXXX. of increase first per fiscal than expense our of $XX.X $XX.X Moving the than of to and on $X.XX test program. quarter, to Elevate adjusted million basis, revenue. for million, entirely development million quarter increase The research year, the of prenatal Adjusted volume adjusted earnings were per year-over-year attributable in including in XX%. last last expense was first $XX.X development expected Counsyl million, greater $X.XX organic quarter which despite our was $XX.X higher was year. share to in an growth. compared SG&A quarter year On to was due double-digit declined success and expenses, year on total cost compared goods an Counsyl anticipated to than sold the lower dilution acquisition. first expenses an million basis,

not cost synergies given As any a did we quarter. the reminder, the the meaningful timing in see of acquisition,

second Excluding significant and our the in XXXX, a Counsyl, earnings to of year fiscal we XX% see half as to inflection Counsyl the of impact organic transitions earnings $X.XX, power. will profitability in increased

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

following debt repayment near-term use will cash. on of facility million to We Counsyl $XXX We acquisition. the quarter outstanding prioritize continue this ended as credit a with our

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

to our would year discuss Now like I guidance. fiscal XXXX financial

range guidance $X.XX our XXXX $XXX revenue our $XXX maintaining revising earnings and guidance of are to for to share $X.XX. year fiscal We million adjusted million to per

for guidance year is Our based two on change in revenue fiscal the factors.

GeneSight will samples, year. meeting we of assuming of reduce throughout impact requirements the First, the which the rest percentage Medicare documentation this the reimbursement changes are of fiscal

based While our after teams guidance with today we are guidance working hard success. made to to minimize the upon impact, demonstrated revisions we our have know what

status. testing, revenue UnitedHealthcare understanding more based prenatal of the of network with expectations Second, from complete upon the a we are out impact adjusting

network For dialogue. of assuming guidance, ongoing remain are year positive our for we despite this out that fiscal we

revenue We continue of of upside sources to remainder in several fiscal see year. the the

assume revenue to the guidance assume drive in Counsyl are synergies or coverage our that commercial fiscal the not the GeneSight size inflection Also, second force. potential upside. half the prenatal status maintenance Furthermore, in-network cancer for It sales cancer trends a revenue does also return companion our and provide tests. with hereditary diagnostic opportunities the in significant positive not first-line breast and potential UnitedHealthcare in testing fact revenue. of in year has we revised despite additional Medicare First, tripling a ovarian of XXXX U.S. cancer an does expanded LCD and significant metastatic Japan the to for

average incremental reimbursement risk expanded reimbursement coverage Additionally, test screening are for potential our improved drivers. carrier with for for or prenatal upside expanded NIPS

every our an in represent From additional is roughly $X.XX coverage it projections. Melanoma million per note Finally, share. important that translates incremental earnings Vectra, an to earnings would adjusted revenue EndoPredict, dollars Prolaris, revenue any decisions to and in upside to for current incremental myPath perspective,

our of our share With It of run to well-positioned the generated program, the the quarter. guidance. organic excellent are for XXXX progress an to Elevate weakest despite rate fiscal we year per the in meet per earnings earnings is adjusted revenue that on business note $X.XX guidance share basis, an seasonally interesting lower

the about fiscal the business we exit highly improvements are XXXX. throughout we of expect we the year, this encouraged With profitability as

XXXX fiscal guidance. quarter our would financial like second I to Now, discuss

quarter, adjusted $X.XX $XXX guiding the share For second million per to earnings of fiscal of towards $XXX to and million revenue we $X.XX. are

would to assumptions discuss like financial our key related guidance. second the Now to I quarter

Medicare hereditary that a changes seasonality by pricing unfavorable the cancer requested mix once favorable With expect sequential volume with perspective, strong cancer continue to and will are to we hereditary from growth fiscal stable are impact in First, second anticipating volume and quarter. coupled we lead revenue. again assuming this growth document to GeneSight, year-over-year

run are revenue we current quarter. testing, the the second prenatal For fiscal rate into continues assuming

assuming anticipating Prolaris, business clinical are Vectra, services we and sequentially. are for EndoPredict, revenue and will sequential be and down pharmaceutical Finally, our growth

the quarter fiscal a full-year continue of line, an the for non-GAAP will the in rate we about of to to rate of second adjusted revenue With company. our and provide Overall, key optimistic highlights. the be quarter. Mark organic we the bottom Counsyl share tax the On business have second run long-term prospects XX%. share business expect remain fiscal we and tax With a the to Furthermore, an that I highly achieve month potential higher in rate anticipate dilution financial operating meaningfully to to are we turn the will over to call well-positioned back of that, leverage, upsides number per per earnings goals. the strategic generates $X.XX substantial additional

Mark C. Capone

Thanks, Bryan.

using if first that would study NCCN recently to for the Guidelines met at practices cancer testing. we presenting and women criteria key across in determine X,XXX additional cancer a I were X published gynecology evaluated In almost provide states. OB/GYN they XX business, like on quarter. evaluated details offices in the hereditary Now Patients accomplishments hereditary to obstetrics in

hereditary the criteria Applying size family establish $XX testing. population U.S. this times of of would a market who the estimates. preventive information to history over of for patients provided the market care XX% met cancer X billion, Importantly, previous

Given previous is NCCN size estimates study, is regarding market Guidelines population. that the payer the the robustness already true policies. are likely that criteria underestimated this seriously and it in used study in of coverage What is the have encouraging in

to So much to appears into our opportunity a larger now additional drive penetration market. be what is

a myRisk men an perspective, with and HOXBXX. relative receive gene to variant in screening of role should for frequent added hereditary cancer HOXBXX prostate a important medical the the PSA Additionally, disease. conveys for up This our population. XXXX lifetime earlier addition the plays positive the in gene XX% From risk more management general a we to who in test the to

as cancer Overall, were continue uncertain resulted important patients In the most an of of received additional in our American who of laboratories were variant a environment the X% particularly myVision commitment of that concerning we practice for gene to importantly methodology patients on study published variants this Finally, deleterious. program an amended we amended a lifetime reports. Program by reports study testing of unique differentiate value XX-year Variant the timeframe Medical and definitive The patients patients XX% this to found one-and-done study other results demonstrates risks large panels an upgrade where in million their XX,XXX these the to evaluating study patients have answers where had approach, variant. classification XX% Myriad's significance approximately Journal in to in Association. all from Classification of and Myriad's The assessed laboratories, X.XX over unknown definitively The provided tested period. classified were of over an

that are patients with data Moving on providers their We tests. not are have with Studies strongly this FDA of and last pharmacogenomic interchangeable. clinical published for week supporting outcomes cautioning shown many unlike notice not as issued companies GeneSight, as you the most validated. that claims testing not are a tests GeneSight, tests pharmacogenomic clinically agree about position to have aware,

disorder an had to approved As subject ensure LDs has to the enforcement a May in believe which depressive time conflicting that exercise FDA Journal or patient by outcomes. clinical The of four commercial the published tests legislation. discretion of over and study clear Pharmacogenomics XX% through tests, legislation test evidence clinical to The pharmacogenomic congressional that the test we supported recent example, their maintained a position issue Myriad recommendations. of additional consistent level pharmacogenomics demonstrates is evidence compared for found and improved the of GeneSight for to level continues only LDTs support X major oversight

it the XX% patients that remained entering patients did patients medication in switching fact active studies medication red remission, that study As GUIDED was GUIDED was the consistent highly GeneSight remarkable a and increase a and results FDA's blinded An shown guidance these an with to the XX% demonstrated XX% drug significance. XX% analysis for to that on has rates, were the of all of arm in a experienced statistically XX% on were which depression. reminder, a conducted highly patients clinical the of arm And results study. a statistically during improvement additional of the from a XX% statistical including symptoms, on X,XXX-patient and clinical which both were the improvement XX% improvement symptoms a was improvement XX% The randomized significant. prospective GeneSight completed given not. even in that symptoms, the increase that a and trials and XXX% in compared in arm of significant, four medications red response, red and response study compared more in approaching GeneSight These switched

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study, for a As reduction (sic) significant savings largest and a and spend was improvements. with Services Healthcare plans the payback payback for service commercial $X,XXX healthcare savings insurers translates utilization. Services] [Union price, this XX-week Medco medication in productivity from total a test a the exclude With these shorter even Health because coming self-insured with there to Union

our prenatal I efforts. Moving analysis, business, of structure to integration some two we important teams substantial to Obviously, previous would integration organizational on commercial is the provide detail commercial the sales integrating like the have and because additional teams. integrated established we existing are new a unlike extremely acquisitions, After territory footprints.

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code reimbursement CPT tests. pleased of expanded were screening see XXXXX for increasing on $X,XXX. for the pricing progress proposed made carrier We also Medicare prenatal have We to

for in promote testing. prenatal guideline XX% at of risk screening. broader Blue carrier coverage offspring. with with to through assessment the recently announcement published While couples testing increase clinically in XX% who The in Street XXX in pre-implantation and we the is will positive the at-risk relevant study a endorsement code assessment vitro such were upon in commercial we for were both seen body carrier couples pregnant the programs. with the Medicare most or pregnancy, payers diagnostic policy those fertilization affected plans. Among who remaining clinical Furthermore, the couples test. this broaden Foresight based as for Medicaid Blue These elected Street expanded the Blue study policy benchmark achieved screened having change XX% results ECS Medicine. for conditions into average for were time XXX in recently policy those pregnancy. prior management couples evaluated the genetic for committees in medical from screening. to be have coverage a prenatal saw at not Street, for prenatal the two market, Foresight expanded we is a Evidence to and Blue medical plans to look non-invasive decisions. planned actionable payer from screening, reimbursement study, the for Evidence Of actions state already an plans, are medical plans technical used evaluated pursued the Since screening avoid we utility Shield their Cross pregnancy To Of ACOG changes pregnancies technical important by major as establishes Cross change for working commercial medical of to Evidence the Genetics Shield

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like progress Next, discuss our Vectra. with I would to

products in for to This Hereditary rheumatology. minimally important important other First, such myRisk patient Cancer, we in an our that of results as study is demonstrating Prolaris of Vectra component is scores the GeneSight. difference a management clinical similar new and published tool and

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XXX of recommendation in from received quarter, States. the rheumatologists favorable United This guideline also Bendcare, from organization Vectra national we a the

this the activity As measures information Vectra's As assess noted guidelines XXX joint rheumatologists. because, and represents of activity." ability provides believe damage "we traditional made press reminder, that disease for beyond Vectra disease in to objectively predict unique important radiographic that Bendcare a approximately release, Rheumatology United decision received previously progression we

these XX% provide of guidelines rheumatologists States. combined in organizations So the for two United

non-coverage would I has that removed Medicare website now formally note draft their the relating to from Finally, Vectra. LCD

received inputs went quarter. fiscal from Meeting importance would by determinations, test. of Noridian coverage the coverage X Committee upon favorable final anticipate a in Based clinical of supporting well the Lastly, Advisory Contractor the frames decision local myPath October Melanoma time fourth historical we local providing the with similar on quarter for coverage positive dermatopathologists determination year. this A the several

opportunity As is the States the we upon $XXX performed $X,XXX an Melanoma in a XXX,XXX price for approximately every year. biopsies believe based United million myPath average assumed selling indeterminate and reminder, market melanoma

of issued the Given number than Dermatology dermatopathologists in of we announce address indeterminate less of the Melanoma myPath the positive in a XX concentrated also team believe guidelines has sales lesions. the country, to pleased Academy of or market. supporting I'm that could American people use this equivocal

test Myriad despite first step profiling XXXX we to summary, myPath in encouraged work the fiscal significant highly the by for beyond. remain gene the issues is test. another prospects cited This reimbursement for Melanoma expression In transitory forward the in coverage and the fact, guidelines. In broaden is I as in the quarter, only

financial solid, committed market focused, further shareholders. acquire increasing improved energized, our our increased performance. substantially, Myriad results drive cash the a for to growth. flow growth will will delivering inflection products is and substantial and our importantly, business, to are our new rates, And from high-quality with the and Our hereditary patients team at growing has that is reimbursement would profitability foundation Most our cancer double-digit continue accelerate and we talented on assets

like call for would to I the Now, to turn the call. of portion the over Q&A Scott

Scott Gleason

Mark. Thanks,

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

session, the we're Q&A participation to follow-up. ask ask we order to now for broad only ready Tina, the Now question one we're and portion session. begin the Q&A Q&A ready of participants today's ensure call. In to please in one

Operator

you. Thank

of first line with comes go the Leerink from Partners. Please Our question ahead. Souda Puneet

Puneet Souda

for question. Thanks Hi, Mark. Yeah. the taking

sort discussions I'm address review $X,XXX And payers? and with to taking So, physician practices we And just first this pricing, the pricing longer this the documentation? one any as Medicare Thanks. GeneSight, on in obviously what of this addressed triggered on steps trying first term? you're of further Medicare commercial longer and trying to being and change on the about in and what here? to does this why understand, think of term with should the are term near in the terms tackling of Medicare the understand blocking reviewed or – to just LCD place sort What had did

Mark C. Capone

Okay.

I Puneet. hopefully So captured all those, of

So couple let into me a those. jump of

sample indication that they out Medicare laid The First, has would in for LCD use. with a documentation from that in the criteria. noted for we note had standpoint a current to consistent provided be Bryan, important reimbursed. order in by required LCD. that it's decided that like criteria are LCD, nothing was some always the We've of to the as of documentation there actually additional – series changed past the support to the

looking Now that care that test. excuse ordering – collect that's the make test is unexpected, totally of that type would like the in market, are primary in available primary I to the to you not care that from data this – me suppose, if physicians you're

probably a documentation. additional not good into so all will to that have that provide step physicians launch to care now take retrain primary when that we of those it's so setting, that the And to we

is implementation the from things lot standpoint, a of that of captures one electronic portal that of an we from have course, and physicians. an documentation So this information

So to information to provided. have have we Obviously levels That the them be that that just we compliance. this practices use is to these are visit that and has high into updating takes that in we that to which so electronically. we physicians ensure can frequently additional portal supply frequency there order that documentation of remind go

portals, this would continue force commercial sales we customer a see electronic increase things doing things don't standpoint, to service, some payers ensure between compliance. from what to have visits, all in-line any we're of level impact pretty – commercial just are From So coverage those calls Medicare that of we think really it much for. has having might they with we as if be decisions, on documentation secure asked we require,

this a the that again the none commercial well any that us decisions. about And target we standpoint processes serve all talked updates ASP. changes the we're we've think and coverage the pricing. any Medicare, for so And then we're of of in $X,XXX putting pricing consistent with That's place to from will making for price that

important of the targeted and also that lives all it's we that have contracts XX% with a reminder signed also those also of United commercial contracts States think payers, are ASP. with at I as covered in

so And coverage that's any would, that of to be course, required decision. support of documentation affected none the by

questions, So hopefully that your of touches Puneet. on all

Puneet Souda

you and Does Thanks. that the briefly algorithm? the require that place publication quality have maybe journal journal of or GeneSight disclosure now, of you not And the disclosure pursued first impact one another the change being of versus absolutely. just were Yeah, Thanks. the factor do sort form or GeneSight on that then some of will what's what requirement. confidence pursuing in

Mark C. Capone

Puneet. thanks, Yeah,

we The very high-quality to a journal is second still submitted journal.

journal have the about good selection authors that very feel made. we So the

they to and they that well in on be interested people have the the evaluate have this is really its so. requirement think That's are a I the data really only journal company get and perspective need They perspective, a own citation. from just we is in peer-reviewed of that tech the assessment to able of all article. capable Myriad committees the doing merits published

towards. expect be requested published get working we have we Obviously, certain that's, else journal, request like just never any didn't first in of so from it journal, to that, be and but so with there experience we're can we what last-minute that you not the journal. this need And course, might peer-reviewed that something

request of for other request our to belief unlikely with It's that a unlikely. also before our highly would as really such from journal is highly highly It highly, so be unusual. this that And has it's but that happened any be tests. made tests, for

made belief in be case. expecting our this – a we're to particular and is request similar not So

Puneet Souda

That's Thanks, Mark. you. Thank helpful. Okay.

Operator

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

William R. Quirk

little both just prepared the assume Great. article release you GeneSight Thanks. that we and the the expect have that Good Should you comments in then we accepted afternoon, on to quarter. in staying Mark, would in your everybody. I in topic, but mentioned the second a perfect sense, to recognizing itself? we as the sense or with see to when get guess, or see tighter working third fourth quarter, not here, just that the calendar publication we're trying a might publication the just

Mark C. Capone

Bill. Thanks, Yeah.

little each then online online. of So, publication, it is, quickly. weeks two It Online delayed the course, relatively happens generally by the when different Oftentimes on is and a in print then timelines second for first print. beyond bit is goes journal. the depends

reason upon the for So, The payers because it immediately want typically print. focused quick. have want or is we pretty acceptance. journal agreements to on secured from publication, article or is that online They in don't Medicare commercial and from we they accepted online be wait the

what deliver immediately. we people why that's because for to that on is so have focused that's And that really asked

for same mentioned, get because they well upon acceptance dossier will becomes, think, us day, clock the with I tech going timeline as that as entire so bodies, for manuscript. the then accepted Medicare that start And to the as assessment I are critical

William R. Quirk

shifting questions. Okay. more helpful Thank That's two gears, clarification. a you. And then

help of have with And back but then nice resurgence recognize pretty in guidance whole competitive your took riskScore on longstanding for secondly, getting you kind a Counsyl is United, for here. you to show network continues cancer quantify how with changing some just of dynamic? organization. Hereditary of us kind that that Can you out it I relationship

sort negotiations, Mark. those cetera? hoping et timetable, some for was just I Thanks, So of additional color any around

Mark C. Capone

Instead Yeah, definitive with really women obviously differentiator. out of clear risks, can walking Hi. understanding of OB-GYN's women Thanks, differentiator a this else understanding that, relative of office XX% important risks. anybody a That's what with her space. is of in an riskScore very offer a important of of can with out XXX% walk Bill. to

as lot that It has previous looks actually into the large the seen of patients go care begin with is the to the as market reasons market a that that's always definitive before a the of care the one so don't historically a they'll have know, important is change the Bill, very higher larger penetration We've market, prevented you But process towards women with preventive that than study. preventive with leaned recent answer. fact through physicians with riskScore. walk One most estimates. a deeper that things of out much And result, profiles is ordering risk test.

has of testing. historically XX% the relatively low noted, change that nice beginning very actually history. we the patients represented with they have levels leaned a about history doctors but to lower histories, double-digit showing and As population patients those those growth eligible that's family in of family much higher XX% towards only we family of Again, levels saw with

days still we of in we're the that. So think early

status we think work published. its Counsyl the or test to there's That the that process, to of continue the prenatal manuscript study is to differentiate continue still to of through From so that. We validation still get have way room network very working a standpoint and lot that's right, we no UnitedHealthcare management made to of a do move for been The course, a company. was, That's decision with at very long-standing productive had by United, to relationship. relationship decades. the you're longer out many of

UnitedHealthcare all continue one to with place. we're the hereditary tests about in want testing the positive their current make with members the an now we as benefit tests particularly can United that And now discussions our to that potentially to how add we so with have so cancer combine benefit in agreement right could have sure of these and because in-network's you that

would much that, United in those and So we're that's discussions members why with we're discussions very and having like so them. with positive

William R. Quirk

Thank very much. you Great.

Operator

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

Steve Beuchaw

for the and here. time thanks afternoon, Hi. Good

documentation Said the more of actually In specific. it's no the way change to this or that rolling and change look you're any be to here, that test? an impact out were and think are you the something tests it tests to as just should that talking if the think suggesting just change change relates documentation are might do you retrospectively, exclusively where change, you way, volume the administrative impact coming have would percentage another ordered? docs is have ordering about one on First, that really of that want this talking to here, documentation, the on back timelines on the I commentary there software GeneSight about about about billable the point.

Mark C. Capone

A important Thanks, Yeah. question good Steve. and clarification.

from impact we We're in volume first we over year. year As a see up the really XX% noted, didn't perspective quarter.

volume. this the nice product order very see change physicians that to And for. doesn't continue we typically So the patients would

And is for the the function is of don't It And that. we documentation submit that really a to unless to really see sample reimbursement. there, that. documentation any providing support we just can't from so impact Medicare

submit So ordered it test hasn't can on It's hasn't that full what complement just really affected utilization. for. the on of the having a transitory documentation. based we It is affected this issue patients

Steve Beuchaw

you've the pharmacogenomics. week Okay. if prepared chance any from FDA the with I and some FDA consumers on if Perfect. be to with there if remarks, clarification since the your on view their the to in And intent statement? then I Thanks. to might FDA follow-up path want about regard last to about how any communication And Mark, from had that wonder time. you to that dialogue have

Mark C. Capone

with once Yeah. hereditary the Jewish Obviously, Thanks, with Ashkenazi BRCA, testing three Steve. cancer, we've from XXandMe approval mutations. before last seen this for the

some seen have in on we that, consistent and perspective vein this a is to we've relative to what historically. so And what led

be time, time to is are and should for last consumer I want that. think for tests what do used the this path FDA pursue the testing, more clear very same not a not tests pursue for that is decision-making. clinical that time path is consumer-type that is they to consumers that the clinical there those there sure consumers trying were they At and a that make to

And so last time that's consistent this and time.

as number we about that on communications with had we've FDA the perspective this the over years have think that. I that's so the And of times a

physicians the couple think I to get have. may questions A them interact can other chance add, things a color from since – then perspective of any we've had note. course, with on is the of I to thing would they I

generally was about relatively awareness this. the low First,

tests really then. we since haven't their utilization of Second, any impact the seen in

had last GeneSight week record orders. we for fact, In week a

we that I clearance its what FDA what this, Third, the confusion BRCA And with the the of testing though regarding is ones that were to meant. similar aware the was note would I The the saw exactly were thing confusing to clinical the XXandMe from language a last more was about pharmacogenomic would when confused they to evidence combinatorial compare from use the XXandMe. were might practitioners. you difference that you say well-aware pretty in one GeneSight, between test that that is outcomes, clear that has stark there's a improved pretty see it significant genomic the single which difference that demonstrating testing that gene is recreational patient get that might approach

I in And take really impact thing last of view I useful hereditary no testing place, we put that's been was is to also in The the saw to when note cancer. that. So light the business. it think BRCA would it's on

ordering patients base they As clinical to then seven in row management. sure test a from medical that year. are the and see upon in to questions we've the And year did Myriad you a test with addition, over accurate see, their we results the grown what physicians coming test make physicians with which to had quarters most

depression. patients test patient with that are the there to to those there that country. pursue XX with the in this given for that a very and GeneSight is outcomes, order physicians to improve to their could be actually that fact those conversations then a patients physicians tailwind depression million are substantial demonstrated with awareness those XX those If think if have to it's working that there thing, I same raise alternatives, in do patients not were interesting patients, and million fact note is case in amongst medications which are we this causes out this

might happen I history what probably think to help here us guide but tenfold look was time. recognize patient last population the is it what we can here, to the So on

Steve Beuchaw

appreciated. Much

Operator

go Dan Leonard question next from Our with line Bank. the Deutsche of ahead. comes Please

Dan Leonard

Thank you.

revenue much bridge was between GeneSight Counsyl? and I change you could guidance question, how First the in was was hoping how much

R. Bryan Riggsbee

Yeah. Thanks, Dan.

$XX so in I But somewhere million, think and the that look we at guidance. it out half specific and say break I terms didn't provide breakdown. of half would product was the around as we

Dan Leonard

GeneSight? Bryan, revenue one represent that the current quarter, of Medicare until or would run And, the GeneSight, does million requirements dollars quarter? Okay. lower in the rate actually the you in revenue revenue documentation interest the view is come run rate rate final since clarification on the late the run How $XX didn't

R. Bryan Riggsbee

see part through year. you Yeah. additional I the say of in quarter revenue lower terms how that's to on for of forward correct the we impact as to it got going would expect some you're would the guide came

Dan Leonard

Okay.

Mark C. Capone

we're, things that for full you've I as at will think the obviously rates the documentation. be things increasing two the time that two course, start happening, provide compliance the of but the quarter, are is to impact same physicians remember, got second additional

some those year Dan offsets that we're to impact there's increase to as to continue there you're to an going to throughout is we about but So think the expect this. year. Obviously compliance I think going the obviously

Dan Leonard

you. Thank Noted.

Operator

question from the of ahead. line comes with Ji Sung our And next Nam go Please BTIG.

Sung Ji Nam

the see hospitals broadly more I offering Mark. talking networks starting taking genetic question. you to including health Hi. testing for are about some one GeneSight, just On offering large question, or Thanks pharmacogenomics. even have

going so GeneSight you. forward? curious I And you Myriad's was guess, then fit environment? also that how in I how trend, Thank would to do And that as see

Mark C. Capone

groups, a very had Myriad, really for conversations Ji. health insurance self-funded self-funded like particularly Sung We've employer example, Thanks, productive Yeah. is with from standpoint.

productivity are the to that significant. because gains are is reasons they able realize the of One

For perspective. extraordinarily are productivity health a employers, most mental from expensive self-funded issues

better of tool noted some that that. a discussions offer with significant progress very in and number We interested. on Vectra Kroger been in a you GeneSight, additional patient a so we And companies there's can that. with outcomes, covering that discussions they're And and made with demonstrated interest that's we're if had they're self-funded to previous provide in very

additional we should in that continue throughout success look you as So approach for year. the

Scott Gleason

still you there? are Ji, Sung

Operator

is your open, maybe Nam, Sung you're Ji line on mute.

Sung Ji Nam

that. about all I'm you. Thank set. sorry Oh,

Mark C. Capone

So is there question? another

Operator

time. there And questions more no are at this

Scott Gleason

for one again week. replay for us joining will concludes All afternoon. This right. website you. our this our you via on earnings A be Thank webcast available Thank call.

Operator

participation today's this for you We Ladies thank please and ask conclude you conference your disconnect your and call. lines. that gentlemen, does

Myriad Genetics (MYGN) 6 Nov 182019 Q1 Earnings call transcript