MYGN - Earnings call transcript Q3 2019

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Operator

Greetings and welcome to the Myriad Genetics Third Quarter 2019 Financial Earnings Conference Call.

During the presentation all participants will be in listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, May 7, 2019. I'd now like to turn the conference over to Scott Gleason, VP, Investor Relations. Please go ahead.

Scott Gleason

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

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

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

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

Mark Capone

and of new specifically share grew Counsyl integration the programs, quarters test force we profitable results by sales in $X.XX volume per integration call XX% Revenue followed $XXX.X our Cancer On growth products. grew basis more XX% X providing share volume XX% after the will an company Riggsbee today's sequentially of growth on year-over-year with third third a success with the our More quarter start prenatal the in the run Bryan exceeded will I guidance and opportunities. which which detailed fiscal our XX% financial the from rate of be business Scott. our GeneSight Elevate volumes portfolio Thanks, adjusted as early year and the new most to X% continued Hereditary growth. in one highlights earnings of was which earnings due of our on provide information volumes million a by quarter a met success once year-over-year of history representing year-over-year revenue from on demonstrating The of per product result per adjusted million earnings quarter test in a expectations in XXXX posted in test will basis. our again basis.

diagnostic advanced technical During Melanoma. CDx we the GeneSight quarter, myPath ongoing another HRD The from approval milestones from commercial saw U.S. also ovarian diagnostic Medicare perspective, a reimbursement and with progress From a myChoice continued as in for submission CDx PMA companion LCD BRACAnalysis a cancer. for assessments. niraparib payers the the first approval achieved of we companion for in significant indication Japan

with we by Fortune in Our employers of are strategy GeneSight directly expand to discussions nine announcement to with coverage Kroger with coverage and Vectra saw momentum XXX the engage additional positive and employers. GeneSight

hereditary patients genes. Cancer screening revised Breast sets least broadening testing cancer all XX Also, cancer to testing coverage. for genetic guidelines the studies foundation significantly breast carrier to broader laid expand the to landmark at two for recommendation Society American the Additionally, stage

also with prenatal agreement signed This X. quarter an UnitedHealth we in-network for tests April effective

ForeSight than which tests. million has commercial marks achieve includes major fourth to this our and milestone having now X product milestone This reported myRisk, reached GeneSight. more a BRACAnalysis

Our portfolio we a would over financial we increasing performance a continues for now success to for build penetrated the to view growth. turn I foundation for volumes have the to with call to hereditary Bryan solid strategy cancer a demonstrate markets of product and diversified and under test growing transformational opportunity reimbursement, upon the our like in believe quarter.

Bryan Riggsbee

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

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

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

on laboratory million doctors we XX.X test sequentially testing we volumes prices we test third a prenatal with Revenue Hereditary quarters a GeneSight strategic have fourth a industry negatively continue Cancer basis on nine the the the the grown total prenatal management sample increased support annualized revenue intermediate was $XX benefit commercial coverage patients. favorable international were in and and the XX% From quarter current volumes initiatives U.S. for third products increased conducting consecutive will for the the including as greater molecular flat been again, than quarter quarter revenue. XXXX. has We're impacted are million pursue million with XX% third adverse revenue volumes broader sequential volume $X.X ordering several and pricing from of quarter. in to million in our six focus we anticipate EndoPredict X.X for quarters. revenue this relative in prenatal the year in throughout Once third reimbursement in up of the Notably Prolaris as million to deletions. quarter X% relatively million a X% million expanded million continue year-over-year. volumes. profitable volumes seasonality. studies to EndoPredict in basis third coverage year-over-year revenue and of screening ordering the growing seen reported expanding set this revenues $XX.X came volume in Fully reimbursement to due year-over-year perspective, reimbursed physicians beyond we which fiscal ASP on quarter Growth revenue quarter. sequential and has diagnostic XX.X was for in now quarter for X% was quarter consecutive $XXX.X on quarter non-invasive coverage basis expanding Vectra programs test in records to quarter quarter was increasing selling coverage screening compared in continuing in represent to $XXX.X quarter increase the despite carrier market. the prenatal low initiatives Prolaris XXXX. average risk, stable and growing have for strong addition average to micro are the guidelines markets up and new XX,XXX the fiscal would was and from in third

our their due pharmaceutical was change with XX% clinic associated growing to the services strategy clinical million year-over-year. backed German lead occur particular of revenue in market. $XX.X a business in hospital this has buyer acquisition out Sale and as to Lastly, the yet

remain the optimistic last XX.X% year. in financial compared quarter discuss several have clinic year-over-year business. on and margins testament increased to organic the about laboratory double-digit for cost of of fiscal team the future our and prenatal our operations would achievement were quarter. metrics lower program. the third the now evaluating to the Relatively $X gross goods volume We like interested million addition a and sold despite is a growth only sale. a I Adjusted to Elevate parties remarkable XX.X% basis of test margin This and XXXX

XX%. quarter $XX.X Counsyl. SG&A our The the the $XXX.X of compared $XX.X entirely an increase is of million to organic expenses, in expense attributable growth. in $X.X acquisition. to operating significant including expenses last goods year. for the increase program. earnings This an to $X.XX of declined compared on Year-over-year research success were total positive adjusted strong quarter development share XXXX basis per of R&D our income a we of reflects fiscal third with of entirely achieving Moving this expense and operating $XX.X was XXXX. third decline an to basis, milestone Adjusted year quarter million quarter Counsyl compared achieved quarter schedule. another year-over-year addition attributable to of was Adjusted $X.XX on increase the million in sold million million ahead On Elevate to last despite the volume Counsyl year-over-year year third In the our cost is expense

declined to $XX the executed in count repurchase outstanding which million second was sequentially XX.X accelerated Our of diluted the the to in shares we program completion stock share attributable the million quarter. fully quarter

facility and This million outstanding quarter and cash on we in $XXX with cash million equivalent. $XXX our credit ended

key the our discuss XXXX to Now year I would guidance. like underlying fiscal assumptions financial

to on $XXX $XXX an fourth million are year share $X.XX quarter we per It the adjusted per revenue earnings earnings translates revenue million full of $X.XX. share adjusted of For of guiding in cents.

Hereditary our Cancer stable volume volume growth in revenue system by historical due are a increased pricing anticipating Cancer Hereditary GeneSight, we with revenue norms. tests business, For and sequential to expect sequential increase and increased stable we pricing.

fourth lower pricing sales laboratory are For to in offset management our growth efforts from quarter benefit by the continued continued we attributed strong due programs. the business, will prenatal expanded the volume which assuming be impact to

for Vectra, relative third EndoPredict. modest We quarter growth assuming are volume to the Prolaris and

effective date myPath from assuming to will Melanoma fiscal up in quarter the from efforts. not sales the the of positive ramp are be are We and as revenue XXXX LCD any just beginning we first

the quarter the assuming perspective From entire and rate for expenses in pharmaceutical will more we tax exceptionally our revenue will third with we full clinic operating we strong fourth that a year. For anticipating guidance the consistent sequentially clinical and own are services our downward down will will be quarter. for quarter after higher an earnings business the and the have trend that fourth

contracts we transformational for run $X that anticipated made share Lastly, anticipating progress per an back compared and highly be XXXX fiscal quarters the earnings optimistic strategic reimbursement our growth we over also contemplate I approximately we revenues volumes three Hereditary Hereditary remain the fiscal adjusted GeneSight opportunities payer potential will we pricing. will fiscal XXXX, our rate result with through to turn a these incremental of to wanted price the With Overall, to to decline. for goals. on With believe modest Cancer number for flat offset share long-term financial per Cancer prenatal an of well-positioned We a increasing that, update will in guidance are business, and in we prospects XXXX, Hereditary as relatively as are business. Cancer substantial the start about company Mark. to in with organic growth provide achieve call very the

Mark Capone

business. Cancer would we critical Hereditary five the to I Bryan. success our like highlight factors on progress Thanks with starting made have the

consistent were of in age. evidence that quarter rate Society that breast of their Hereditary patients Cancer This patient identification. would make to as in other mutations regardless to of such deleterious the is the with found decision guidelines simpler This lead that double and Cancer encouraged the patients the National for Surgeons we Network increasing recommend of Comprehensive patients. American testing States higher based If expanded more is all Breast dramatically could clinical cancer than United suit this number criteria the followed guidelines penetration upon

qualify than penetration higher This XX than met Additionally, expansions previously believe a are a cancer a second the showing OB/GYN of is of result of more practices hereditary testing cancer testing. breast is and less once we for criteria for substantially again presented hereditary testing that criteria States and patients that market estimated. than million at in ACOG that X%. study number women at XX% We United data there

multitude for a We diagnostic hereditary cancer market testing also expand through to programs. of continue to the companion

with represent companion receiving pancreatic POLO significant placebo. year This would clinically CDx announced XX,XXX statistically survival from States. in Myriad for AstraZeneca's identified for new with who diagnostic changes progression patients both plans United by study data per this cancer germline new PMA quarter This mutation supplementary patients the cancer having to CDx as applications a as BRACAnalysis file indication BRACAnalysis indication. conjunction drug free in a patients pancreatic compared AstraZeneca to had their are where and

resistant Additionally, we cancer metastatic current United prostate diagnostic rates partnership are and than resistant X%. provide recently prostate penetration expanded pancreatic in men like with patients year cancer testing AstraZeneca our will metastatic Every approximately castrate and cancer. less XXXXX testing the and with castrate States to develop BRACAnalysis CDx companion Merck the

is The HRD significant submission more conjunction three myChoice of a the or have Our filing chemotherapy. tumor with of testing only module April for myChoice sensitive myChoice of cancer HRD compared first ovarian companion for positive ovarian intended achieves PARP patients coverage a patients objective business a for approval XXX,XXX the and PMA response diagnostic Proposed the patients use where for pathway includes may platinum is negative QUADRA the for the X% lines to which rate population. previous milestone test. eligible saw become with for positive HRD inhibitor HRD myChoice XX% received results ovarian an the CDx cancer in study based provide niraparib FDA cancer of would the code for HRD who to payer myChoice in survivors. in upon who

a would of providing the trusted to differentiated customer with The strategy offering three has nearest customers our grew prenatal critical like is pioneering team through grow I from second application. and experience to start supporting complete the Myriad size advisers success double is Prenatal field-based business product a with frictionless offering competitor as factor that than which more pillars our science, X% new volume. test sequentially. a

This quarter increased XX% XX and expanded prequel three than the we sensitivity testing to of an replicate by for which non-and-GS with chromosomes the test other for to aneuploidy of the is based pairs difficult provides the by chromosome continued differentiate rather of laboratories. area routinely This differentiation technologies. approximately launch assessed all

patients in The the at X% XX,XXX American that presence the highly prequel a with of of no meeting did not rate have cut-off was Medical prequel test. patients. a approximately Additionally, X patients patients improve of data XXXX rates X call provides differentiation is showed fetal College accurate of Genetics laboratories of cut-off. the past fraction a in the critical accuracy below a competitive in XX call even no from study This as area

of miscarriage in typically a to non-invasive Importantly testing on receive patients cost $X,XXX a approximately screening go prenatal is approximately X an no-call of test average of at who receive invasive expensive and poses a both highly eukaryotic amniocentesis on XXX. or risk

led also during a the seasonally XX% by to its sequential physicians. great force quarter in growth We strides Health sales volumes X% increasing made which driven These in quarter. integrating the volume Women's increase the weak ordering total were

While we selling upside gains training team their products. success week seen still our sophisticated is early as and sales these continues there experience significant have

that proprietary we X potentially diagnostic and melanoma Our of States performed review Medicare newest active commercial to after XX and thought is are skin opportunity per product XXX Every is year exceeding by dermatopathologists. the board market biopsies This expression validation potential RNA an United evaluates it cell biopsies pathways. million with there for with a useful with per studies certified the the XX% myPath are after signaling melanoma the obtaining in myPath the of reimbursement. Melanoma revenue these cell approximately million overview ever translates diagnostic XX% data provide and associated indeterminant from Validation that myPath differentiation is demonstrated most intoXXX,XXX year approximately tests therapy function genes test accuracy. large have to year. XX% immune in

data also in in that by and myPath myPath study diagnoses Melanoma medicine a patients with was XX%. have reduced We Melanoma indeterminant published strong of clinical XXX XXXX, over utility

revenue eight over X,XXX to which yet reduction practicing team the concentrated test accessions pioneering disease second pricing the personalized representatives second XXXX expanding excited more a coding select sales in established. of will provide expect with very after study in the for have dermatopathologists. our generate to in personalized reach Additionally, in are medicine the To-date, efforts into XXXX quarter an published state another about We're U.S. receiving XX% we and market of result. to we and to have only tests. commercial medicine fiscal Overall, benign XX% perform process limited a in sales patients XX,XXX than dermatopathologists to of efforts showed

test, is the have third publishing Our to positive most to product covered reimbursement is data two analysis of are complete expand GeneSight guided coverage increase if for success initiative we critical discussions a over submitted payers on to strengthening to continue to new dossier and this area representing commercial study. additional our continue factor important the XX% lives dossier, from in the

medications drug the patients moderate for one failure. analysis Obviously, an by with is patients which entered Gene that are the medication contemplating alteration use GeneSight of is subset for use no interactions their in severe indicated [indiscernible] First for at indications the green GeneSight. with longer study patients evaluates with the consistent for least depression medications being alterations in to considered neuropsychiatric after medications on physicians entering for medication.

GeneSight example The improvement. another the in approach single a to in In were the had in better the this one with excluded metabolizer value metabolizing response into As patients as this gene study GeneSight in such patients outcomes to compared tests approach single XX% and the in statistically demonstrate drug was symptom increase and and patients. had gene the clinically patients test all of in the of GeneSight analysis significant. a results lower exposure declassified patients normal classified clinical metabolizers statistically by of Consistent those analysis three intermediate guided XX% endpoints were arm in significant these combinatorial permission, reclassification, with specific appropriately a this additional category.

While to-date very for they these additional progressing studies process data. have the will two available few publication additional requests payers through had although for we are be

engaged agreement of I'm the in which announced July. the number wellness Fortune we the from senior in improving finalized companies Vectra to and GeneSight spend. largest States, executives now provide agreement a United we Kroger, by have employer large that care value with with announce human health resource GeneSight implementation their to XXX quarter and pleased This the fourth the outline increasing also follows employee Vectra the

medical treating also coverage are over These among GeneSight an States are have market largest catalyst XXX commercial pharmacists, Vectra. X,XXX Fortune share pharmacies a step implementing Kroger commercial currently typically this retail patients of Fortune from in changes the They locations. stage Kroger among of GeneSight. in and on employers discuss additional X% with payer national late part employers early insurers in discussions for XXX the United physician are a is with discussions intervention additional As has in often for agreement, company and eight and coverage. stage customers Kroger

for approximately Shield number Blue New announce expanded genes in in We that X in ethnicities. York Blue to newly screening and driven ACOG criteria atrophy carriers the of Western the appropriate total be medicine, risk of included expanded panel meet that studies at covered and Cross evaluated including in ACMG increase an frequency Expanded York; Northeastern ForeSight over that XXX data I'm criteria. and first carrier guidelines carrier to for United coverage and Another XX in muscular believe code. in and is to for opportunity of currently Blue reimbursement XXX,XXX will Shield advances XX the the States ForeSight testing announced goal genetics to panel screenings test important XXX of Cross group by testing broadening the we for for million second XX only stated patients. commercial evaluated additional recommended for from published X conditions patients genetics medicine and similar guidelines XXX SmartHealth; coverage Prolaris, spinal publication criteria, bringing to screening in all would commonly provide study pleased the genes which New lives the ForeSight showed was of to reimbursement The patients. Blue finding these pivotal that and expanded recommend in independent XX,XXX recently With new decisions the be evaluation carrier end study of several an strikingly found genes inclusion to applying Shield criteria. screening met A all of broaden results Cross XXX inclusion will Blue cross established Kansas, Blue

effective guidelines, Administrative a to Lastly Note diagnostic of Solutions the melanoma Dermatology from which with coverage aid of been final now Contractor becomes mark. and determination have Melanoma myPath the of equivocal June. the Academy we received comprise from in myPath reimbursement Melanoma, Medicare patients that Meridian lesions. XX% or commercial and eight in diagnosis payers potential has Healthcare Medicare NCCN in of which Melanoma American recognize the myPath recognized also approximately local

with for engage and expand for broader payers are myPath is continuing the to positioned coverage coverage. We believe dossier reimbursement to reimbursement well commercial Melanoma

cancer Ministry CDx patients Moving quarter from on this for Japan ovarian in eligible and already first the received we companion line for are the cancer olaparib. international cancer business, Health companion XX,XXX testing. approval BRACAnalysis have approximately of now every to with we Coupled diagnostic where breast indication Labor the year Japanese Welfare diagnostic as there with approval in the metastatic

reminder Health for a in application submitted fiscal in affected Japanese recent in As Kingdom for EndoPredict, BRACAnalysis Labor the to ovarian cancer, in initially nice breast the the well. Cancer to patients cancer in also the for have could expand EndoPredict improved seeks quarter, of patients. or Welfare Ministry future but with application second advances we and United as approval women reimbursement we our Hereditary unaffected include Within reimbursement first, several in the December. seen market, international Its

financial Italy company. the in now EndoPredict will they encouraged region transform prognostic performance our cancer for In first reimbursing very and summary, coverage potential and announced has the the well. all with of we breast as to tests announced the Additionally, remain progress Greece begin has

has returned business growth consecutive cancer to Hereditary quarters. two for

in stable revenue expecting year are fiscal We XXXX.

with two catalysts. women's the material growth drivers health near-term and business both meaningful with We have have GeneSight

the the than back ability for triple the With future. XXXX we the I in that, earnings we Scott. to program. continue to more power reimbursement to and over product would like With call company now we generate have to growth the turn leverage we believe growth coverage, and continue operating strong Additionally, Elevate on volume double-digit execute our as new earnings increased to

Scott Gleason

Thanks Mark.

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

Kevin, ensure broad the session. the me participation Q&A order are ask begin question and asking now the we for to we're portion participants one follow Now, We're call. Q&A in session ready to Q&A up. of one today's please in ready

Operator

[Operator you. with question Thank Bill from Quirk Instructions] first And Jaffray. ahead. go Please Piper is our

Bill Quirk

Great. Thanks. afternoon And good everybody.

first Mark should call to we decisions making obviously we be see private glad your gene so the some some [indiscernible]? still decisions you're in front shall in here three off, many thinking next it to again positive six them see the So, months -- of dossier that payers, hear about to coverage that's of

Mark Capone

-- make the believe Yes. Thanks continue Bill. still progress to dossier. We significant and they continue the to progress on of the reviews

anticipating we gone assessment all are a that So, of the have still of by year payers the the for calendar will tech through end GeneSight.

So, expectation. I that still think is our

some So, extensive what's a review result that's as dossier these dossier you're and and very do going take that a requires underway now. right while a to if big it a of review, there's pretty fulsome

any So, to comments we change timing I in we don't made. expect think the and

We continue data. to see positive receptivity towards the

Bill Quirk

rate currently covered the if Understood. in Melanoma here that if just on would coming had And that revenue. been of Bryan, then, for guidance in by for annual quick off, secondly, run any, then, terms prenatal? predominantly the Thanks. ones of midpoint quarter Medicare follow-up first as a fourth myPath be what is the two And

Bryan Riggsbee

Yes. Thanks Sure. Bill.

around the our coverage. or think that reimbursement sought the is to myPath years strategy get around Melanoma several just point as ago we question we I changed

market salespeople that into relaunching launching just really we're et terms of cetera. hiring so, in And

think a about So, talking really today. really number you're start we from I low where

just our excited think with I We're in guidance, line we are what terms the similar expectations were. of, of the continue midpoint the about to see prenatal to trends in business. relative think I

volume our on the range anything larger the potential force, previously. in of would in I we don't line we that I terms guide is provided with the In sales have think to particular, point feel based I like think

Bill Quirk

Thanks it. Got guys.

Operator

Donnelly from Sachs. Goldman [Operator go ahead. Please with Instructions] is question Next Patrick

Patrick Donnelly

Great. hereditary Thanks Historically, and the stable pricing long-term going the forward. a go you talking been one talking contracts slight pricing guys on quick quite obviously, on about decline a bit about given maybe guys. just place. are the are that in Mark forward cancer side

got changed Just type would is? a think there there, early us what little it just help more came contracts a what of that So kind decline? it clarity help. and of decline maybe about few up Is to

Mark Capone

Yes. Patrick. Thanks Yes.

we're obviously think the number discussions took of and with a with variety opportunity we contracts long-term in I there's those products. of contracts a

Now, as they XX took a in some negotiations we up or we their renewal. we pretty of to of their started with come contracts those different as and to other have as extensive some portfolio opportunity potentially products with the -- to obviously, Yes. solidify products were

think frankly we're of of I expect those, the decline quite to continues very pleased and some still price the we just performance strong with be some we're for decline that the think slight volume I that noting is business, modest. but

that premium I with with that continue position premium such down is to we been That other to So, we've are that of initiated contracts a to we justify really to to that has advantages. think laboratories a other it's relative everything justified very we laboratories. that time said, consistent since at which relative be quality there. premium in these come in historically the the premium magnitude first has our The are continue

to breadth with this narrative, how very we've So, any we've consistent there's really our think what change And market would continue anything become always expected I this evolve. think I don't in think encouraged is more I if that, cancer breast and such change we've potential patient cancer to for with who's is now in seen testing of in expansion actually a eligibility. significant eligible a as the hereditary guidelines

ago. are I thought so or of positives to would a relative we think even have even year actually maybe what those all

study marketplace than ones excited that of in course, have And noted in other those what of numbers So, women expected. had indications that now larger are we we the substantially guidelines we're showing expanded that is expanded I this is we thing the originally about. think that, those with qualify multiple new the is unaffected

hereditary a in that's so, for million means we're XX single penetration are testing the low a in patients which cancer really that States, you've market market. from digits now, And that United over into got a eligible standpoint

so we business. So, consistent use pricing growing what now very continue I volumes, this we and to in indications with think I encouraged market broader the about be we've expected got think is for this

Patrick Donnelly

Okay. And for the maybe guidance. just on then, Bryan one

raises by guys think [indiscernible]. $X.XX, a I little the for you less beat

talk of help think the shifting I that there? just guide and You Maybe us pieces mean through the just about around. German moving the clinic the was moving kind piece around what

Mark Capone

a Patrick. on and $X.XX were at the quarter as guide to one for relative is, the the of some to I related before. happened about positive you look tax we had as make Yes. expired quarter physicians that things The point during which expectations had some the the of to statute we Thanks where and our quarter impact reserves the would in

So, I what previously. right line was adjust our if you're you in that think for guide with

Patrick Donnelly

Okay. Thanks.

Operator

Next from ahead. question with go Tycho JPMorgan. Peterson Please is

Tycho Peterson

Mark thanks. Hey, –

Scott Gleason

lost you there. we Tycho,

Mark Capone

Tyco you on? are

Scott Gleason

go Tyco Operator, can to he then to we'll back we and comes on come if the question line. the next

Operator

Absolutely.

So question of Please Bruin with America. Bank De go ahead. Derik is next

Ivy Ma

This is get to taking few you Ma Ivy today. quarters Thank for previous about an talked in Hi. wanted update on question. regarding changes the for just we Derik my GeneSight. I

about talked cash was the issue You related additional collection there requirements Medicaid to LBM. documentation some and

those any So, on issues. Thank color would you. appreciate

Mark Capone

orders that higher August, requirements to that of percentages that question. of the compliant additional on test the imposed From in make progress nice in with for the compliance, continue and Thanks come higher end the Medicare perspective Medicare the beginning Yes. we of are ensuring September. the that documentation

I we're progress making think that. on So, very nice

made second think adjustment benefit a returned standpoint the I from from good a that. perspective. for can to on you I laboratory the as you can expect see from revenue quarter, see the management as the and a from job has programs, would revenue we we what you this some team issue the of think And volume done

where prices to last average quarter assuming think we're I next well. GeneSight for that quarter Bryan quarter. they average guide selling commentary were in also for noted we next for our in quarter, this saw relative And So, prices as selling the stable stabilize as

So, issues those are I think largely behind two us.

Ivy Ma

And the know what's you. follow-up, 'XX see revenues lab, but talked wanted [indiscernible], can the you a these about just guide? adding quarter, the back you you. Thank And last German there. to as the delay clarify to Thank are we I issue

Mark Capone

Yes.

stages to last change -- as a buyer I out. decided was a in approach negotiation commentary, think strategic we Bryan's to of that acquisitions. had was it back laboratory their in had they really the And noted in it

backed out And that. so, they of

a we and queue that. the at other looking are of actively are very buyers that Fortunately, have number in

why expressed clinic. the And continue the expect sale that of to so that's optimism Bryan we

Ivy Ma

Great. Thank you.

Operator

Please And go we ahead. Tycho have Instructions] Peterson. [Operator

Tycho Peterson

Thanks.

before. Sorry decision can about Lab at comment preferred United April of you the their that the on end Mark, network program. on

Just curious, implications any for from are if you guys volume? are pricing excluded and there that,

Mark Capone

through. Yes. back And Tycho. Glad got you Yes. welcome

billing United contract think change any pricing part really any with I from that things noted really United. processes procedures commentary. or our impact or in of and don't are those any of as mechanistically doesn't anticipate the that of or we This agreement their

at So, laboratories network. the And we're in XXX there's look I that Board, no like think pre-authorization. not you if really across change has anticipating in United something

in included were X that only think I announcement.

smaller any it's number ultimately way of chosen. got the plan operating see don't in with our So, obviously from But, really a perspective, changes laboratories United. that we on we

Tycho Peterson

lower Counsyl bit to achieve still? margins you margins, EPS about is operating talk were on expected. than we going And the in quarter in thinking just and on And how fourth the track little accretion on then, quarter you're margins fourth a forward? for Bryan, Can

Bryan Riggsbee

Yes. operating quarter. we the to track Thanks, expected Tycho. where quarter We third would breakeven of say with in that Counsyl. right on said that the we be we're margin Yes. terms in I in reached

so, financial we're the track to for Counsyl. I relative on performance think And

think obviously weak as look sequential margin I profile seasonally in you QX is the quarter. a

that it cost an margins so on revenue a what is base is. that lower And has impact and

into move the to revenue result. you fourth expect in see and improvement you as a you as margins increase see So, quarter would

Tycho Peterson

last comment on quite just bit. a can because up did go receivable one they you then, accounts And Okay.

any Thanks. there. story curious there's if Just back

Bryan Riggsbee

on Tycho. story Thanks, of couple The Yes. a accounts receivable, things. Thanks. Sure.

comparison First, the looking [Crescendo on this as number year-over-year the not really is at the if of we our Counsyl you're also call, the mentioned we in movement in the [ph] there last last And we year. Lab] quarter. in December completed year

samples that those we updated, we were City, current been change related claims. into processing March they've there a in all paid Lake so submitted to unable significantly April. We and to excuse up those related submit about to Counsyl, me, million had claims and system to address with $XX And in claims, Salt so was Crescendo started and Medicare being update in an we was while do so, moved as the quarter build

to we be cash So, and would quarter really decrease. strong expect a are QX to

that typically sequential is thing is other the quarters. look a month. strongest QX you impactful March timing as at just in quarter the in whereas month is The revenue change of a is strong October the

AR to quarter. second in the time more So, the balance collect

that QX So we back down. in Thanks. and again, to balance expect strong come would cash

Tycho Peterson

Thanks.

Operator

Barclays. with Meehan Jack from open. that is And question is line Next

Jack Meehan

the of you interactions Good focus on Mark Thank have GeneSight. you. want I any the discussed? and you if what with FDA since GeneSight beginning year have afternoon. the on to so had

Mark Capone

a made Yes. came course commentary clearance was I that the with on of call Web the the their which to XXandMe that with the I serendipitously Geoff] and Jack. was back refer on at last from for got I day thing Thanks their along [ph] conference posting I site. FDA tasks, the [Dr. think the the that actually was of that other just comments

coming talk And had that so, a and aware [Dr. we [ph] chance publication to up they in they brought out GeneSight copy speed that point. have that manuscript a not send were and relatively actually of fact then did I product, the would were at if we that on I shortly of so It's Sharon] a would acknowledge to clear interested.

have is and so mailed they to manuscript. them And we've what that's done that that so

the that sending really following of on discussions over us that's that largely So have any really them publication. is today just up been

Jack Meehan

the How then, remaining and strategy non-coverage. decisions GeneSight to as and follow-up with raised coverage the reiterated health a on in are And what's your front, they you we've Evercore Anthem plans? study any the published issues guide both address for now medical planning thanks. Hey just payer coverage reviewed seen and

Mark Capone

Jack. Thanks Yes.

interesting for were policies payers either that publication came written. beginning those about talk publication it's by to before January. think those was of time a I chance both out actually We in had never one timing to that of the such these guided that

is important what's which time study. got dossier, Now about just actually really have comments only January. review the Frankly it was not the in submitted comments dossier, enough they quick the entire the actually to made they GeneSight guided about didn't were

been example was pages updated one. XXXX Everything update that guided So, for out. that publication broad much policy the before Evercore a if that policy that you had on was even came take pretty

commentary was but And of So, discussion dossier. an entirety. the there there is, its with were some Same the other GeneSight about tell some extensive dossier and to there's publications it guided, part because are and in can them you Anthem notations was no true was no wasn't thing really comments. with all that references about the really there

them number there you made. I think Now a actually comments we interact as that of already I publication, the the didn't that with errors you'll some after think note in even and a were of that the result fact of were have

them opportunity So, to some extensive we'll they out review to be dossier reaching opposed have do as to clarify more guided obviously, and the just commentary on as study a that. an

seeking. some of noted because Anthem were example, were we For were they by indications irrelevant limitations the not

in accurate. for the patients included naïve that And guided patients. coverage For perspective were we're naïve treatment our that for noted because was example, treatment factually they irrelevant course, asking not not from of study

going we'll just some And additional with as that so, we have opportunities were things correct those to to them. be of have there are discussions

significance other to impactful really the what one they been improvement an and thing to the focused it's Medical on fair were to symptom Evercore in interested note, is say was think and had -- the them showed you where I the all on expected XX% the Director was to this you benefit from board the are not of if statistical patients GeneSight I and where are, the endpoints. that that see that focus on on exclude across call, data the

and certainly to as publication. interest. quickly into data that was data can of as we're very working we that They're publication that get So interested in that

think that part of your two. addressed I first Jack those on question the So,

or As gone noted not they of I as far to through our ask commentary, have subsequent we've that really respond had process. reviews publication in the to the lot any that a positioned complete post as of obviously as tech through assessment questions well But in opportunity had present payers, an the to go direct of we dossier. the and event questions. them in to they've many other guided We're my

gene, lot a And to but in positioned I other been not questions the any two manuscripts do available. course, well that exclude compared answer if publications and with have of any questions, have to your there the well have call of green today, to mentioned if patients and we'll happens papers underway are of are which So, those. let or me we're respond what how's you single see a test those to to

Jack, interactions a mentioned to that unique I is a would be of you we've the had or by we noted, approach important. as is and use We which payers employers as continue encouraged as that. mentioned actually actually now can customer with very we note Kroger That's Anthem, you Kroger that Anthem's.

to very customers. their on actually decisions be their impactful because bring of to they so, actually to innovative their is choose it's payers important own. these payers And move like on innovations customers types That to large for when the quite ones that

with working the large actively now that national we that with working are I payers of companies customers. Fortune all different so, XXX right that they're And mentioned have as

so and was to plan they other this decisions. be to opportunity we'll important that so, as impetus some payer employer. gives behind ensure taking understand their It the And other a each why connect they that to review

Operator

floor. further the no questions turn back are from you. call the There I'll to

Scott Gleason

available site All concludes replay Thanks on A right. week. be Kevin. joining earnings This Thanks call. webcast us for for Web our one this our will via afternoon.

Operator

conference and now thank indeed We for does may you that conclude your disconnect. participation And your for today. call you

Myriad Genetics (MYGN) 7 May 192019 Q3 Earnings call transcript