MYGN - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to the Myriad Genetics First Quarter 2021 Financial Earnings Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] And as a remainder, this call is being recorded today, Monday, November 9, 2020. I would now like to turn the conference over to Scott Gleason, VP, Investor Relations. ahead. go Please

Scott Gleason

afternoon. XXXX Good the Genetics Myriad Thank call. Welcome quarter earnings September you. to

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

Chief and on be you’ve today of release, Executive and can be webcast myriad.com. Investor Corporate Paul Investors earnings I’m Relations President If our will our Gleason, the website Officer. and will can on it had our our and to section be a review the not Senior me Riggsbee, call quarterly at our recording website. Financial the heard Officer; Chief archived Scott found a Diaz, Bryan call via at in be of myriad.com, with chance This and Vice Strategy, President live

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

Paul Diaz

be about our with and of execution the point a to Thanks, company talk of Scott. team. all I’m Genetics of today and excited and The forward. the quarter proud to delivered you of I’m just path here strong transformation journey, departure our Myriad

of me to our get entire their need We early growth and to sharing on in and to strategic Bryan, transformation and our also and health and quarter with healthcare information grade are of At power the already with Myriad continue you I own and lives mission speed. plans, because clinical another by treat we today. Nicole, disease. team support the I control genetics, diagnose, their we genetic to making want those acknowledge to forward transform unlocking to difficult progress dedication and provide COVID-XX and management up I weeks professionals manage some the to better they wellness. the highlights to to want patients Genetics insights empowering work Mark time, look the of to last over I hard challenges. operational for through XX their as related thank believe prevent I same and improve help came with

who increase and patients disparities and in more more as advance and racial outcomes. realities address and ever, become reduce is we the healthcare protect physicians to than more the we mission Our We that to relevant of and collaborative us. to economic mission, particularly need to social less better on market. serve facing and our customer healthcare the adapt complex, access rely must outward must oriented To

and process our to hard resetting our grow. transformation We financial have refocusing operational started working base, business of three-phase a and

teaming teammates Myriad recognize results to I into timely working more X,XXX go to our deliver across to innovative lab who the efforts. our want and these field and operations businesses test to company; to challenging for up the take second of we incredibly our find our smoothly thankful a ways thank people all times. to detail, customers across onsite dedicated Before personnel I’m running your in during are our and serve keep to our

look efficiencies gained services precision significant better can these and and leveraging we looking new across of As solutions technology. position several see strong spending partnerships pressing we medicine. through in health. there and and health, see Genetics to at are innovation, leadership with medicine opportunities, to confident achieve genetics, healthcare, patient the months oncology lower health areas with significant, for we and populations systems mental the to growth women’s and better I’m be Healthcare demand we a are and collaborations Myriad And needs is our After diagnostics and expand molecular precision leadership apply outcomes in patients, power that to team, in payers, providers, cost.

Personalized change And trends data to virtual supports genetic converging large diagnostics consumer growth models long-term economics have molecular profitability. growing opportunity. market and of traditional We and are of and sustainable a care. the U.S.

to million more experience, we today, can products before. to have bring we the and creating their products a ever performs benefits full opportunity to than tests our commercial the capabilities health so opportunities and to a meaningfully our better Myriad have improving this of year We elevate many by grow potential. our people customer about number a

and a need operational have focused on and recognized reduce and know-how, costs and scientific execution to do we portfolio excellence. respected be We complexity more internationally but

and capabilities innovation, operational expenses research X technological innovation, will and invest plan, build of after commercial, products deploy revenue, X, costs. our our completing M&A. complexity prioritize journey. will shareholder is Phase enhance capabilities, performance with In our foundation initiatives a reviews in bring we to are of In organization COVID models to now improve as launching new and commercial underway growth begin value. and new and X growth operating operating reimbursement start refocus the and increase tools as cycle key strategic financial Phase stronger we support and commercial work and base, with reduce transformation and around the revenue to our to new three-phase financial we line Phase reset recovery, We the consider in our transformation product continue we a accelerate

As are that services for pharmacological the part markets myPath business exploring strategic we of announced business afternoon, for research transformation diagnostic we and Myriad alternatives dermatology which our our the contract test. plan RBM the unit, which this unit, conducts industry,

and While We’ve multiple on they had we of strongly strategic businesses internal our be with I’d not and synergies we all work long-term now growth and first core opportunity complexity will we’re business four-point the discuss portfolio, above It follow. believe and both putting In believe following else, we’re part businesses, organizations we financial indications positive they and customers evaluations of with them buyers, and divest through. have strategy. customers roadmap all like for to interest the confident and these guide in the people our our we inbounds the patients growth the when strategy our to to starts are attractive. rest inevitably to a trying of from experience, to the minimal my execution in results are ability serve do. of prioritize will and

teammates us in customer-centric, build allow will to with Second, digital virtual ramp offense that up proposition, play positioning, our tools. technology-enabled enhanced commercial convey value support and marketing, we consumer sales capabilities frontline and

and products access With increasing avenues acquire sets. a way existing capabilities using differentiation, driving will reinforce simplify their and products portfolio. maximize do potentially extensive as let elevate by and while and we and Fourth, background to few the utility look just developed, with synergies mind, things the with we our full awareness, on growth, cross-selling a model, direct-to-consumer unlock patients across organically Third, data business we me for that of will new potential new we partnerships and are IT focus our interact we physicians. through the in clinical examples change and creating to to to share

with collaboration XX% telehealth blood kits draw increasingly cost in signed first the just Hereditary oncology a mainstream the GeneSight to out estimates, to care how pocket or networks portal now A provide product of of by enhancing to our plans. samples help and the on education, like customer support Cancer have guide timely, experience. delivery. physicians facilitates are we as genetic patients arrange at sample get important, new care interfaces results are ordered this transparent, our women’s our suite and through becoming and interactions the where pre-authorization patients. the directly well same time, quarter, process home telepsychiatry. launched into test are areas to patients a an as In more services ability ordering, optimize the patient We streamlining better like for At and seamless telehealth, to ensure automated shipped of that Myriad virtual providers and We Complete especially moving health, In customer visit. we our easier myRisk

increase metric a of our to and a simple request. expand expect with doctor’s We collection as to myRisk or offices Similarly, are online patient’s directly being testing click now this homes sent kits sample direct-to-patient we to marketing.

ensuring working reducing and offers experience personalized compliance Medicare and the friction integrated scenarios myGeneHistory health We simplified IA compares workflow. tool policies. personalized that to commercial are testing. if with with patient national cancer with histories In between This are are education improve and for now orders we is expanding mental determine and guidelines order workflow GeneSight online questionnaire with driven qualify the patients family EMRs to non-Medicare

As in a result, order we XX% are reduction order time all a seeing types. across

year, nearly our quiz driving way X% our up showed and By take but than myriad path recently and is getting cancer hereditary smooth completed a digital and marketing. patients hereditary of meet visitor the quiz. to last criteria, Another fiscal tools ended a strengthening patients are the who test. like our the online experience example, demand medical interest quiz refresh million improve engagement in by and the the X We less in of of product corporate sites cancer website patient way we presence the to

significant a low-single-digit opportunity So double-digit leap to to to there was conversion rates. try from

initiatives need. management the and We more patients underway help and they through this management customer relationship have capture opportunity to funnel testing

future zero identified to is portfolio. reduce AI to launches, opportunity. over includes to software, to across portals of zero ease this developed today ordering Many area reduce Another from are undertaken we reimbursement process. payers received product initiatives time, number leaders of streamline tests for internally patients. introducing we pre-authorization see features on have tests our our appeal for the new and already revenue our We several have perform tools prioritizing on and use this to ways with claims who or commercial This focused payments we commercial optimize

These strategic insights research valuable in providing are levels. brand consultants our positioning, customer feedback including insights and Bain of we initiatives As our gaining external whose pricing, new are are from well, reviews, service commercial complete on as our product leveraged third-party our development being plans. and we equity, the Avalere, satisfaction

to consensus Myriad’s working community We’re better the And to medicine. management broad forward year team position path more execute and ability genetics a develop March next board investment sharing in and our as reinforce planned on precision with to at to look confident leader of investor our in with in and I’m forward our our events.

I’d like turn quarter. to the discuss financial Bryan over Now our call to the to for results

Bryan Riggsbee

am on provide pleased I quarterly our Paul. and Thanks, financial results information our more outlook. to

to test trends, test quarter, XX of with XX% of $XXX.X saw ended XX% XX% elective We quarter sequentially. at total on quarter. compared which total We procedure pre-COVID increased This improved volumes reported June of increased recovery execution. the levels reaching and total the revenues we end sequentially million, the XX% and based volumes

to we we our increased in were demonstrate as reduction. cost the significant on financial revenue model able leverage focus and Importantly,

products, Hereditary further as income plan. future million see now like in would over the our Cancer. by normalized $XX quarter we execute operating business the to with to leverage for and our revenue our transformation sequentially we increased discuss This trends adjusted on fully I and starting

in Cancer in was Hereditary XX.X XXX.X the year. million of million the quarter versus quarter last September revenue

growth, the X%. average test at total price Looking of volumes components selling declined declined and XX%

perspective, September volume of quarter in with rate. cancer last as pricing on we Health, run to ended their quarter seen pleased with quarter are continue weekly revenue cycle of focus in the versus approximately pre-COVID-XX was management. revenue From Mental have $XX.X the XX% GeneSight our the we we volumes reaching year. in million $XX.X a the hereditary In total We stabilization million

saw the and and price GeneSight Looking orders by sequentially total From components year-over-year declined ended XX% we test XX% volume volume levels. by test increased declined at a at volumes growth, average perspective, year-over-year. quarter we selling of with the XX% approximately pre-COVID-XX XX% of total GeneSight

selling average companion took increased same screening XX% and was believe million, pre-COVID In Vectra I quarter several quarter recruitment the and the a milestone quarter, of women’s to end volumes X. approximately in compared which urology in reserve was calendar million last Vectra declined predominantly increased sequential price basis XX% the their revenue in in same myChoice payer quarter payer pricing test which will increase year-over-year. the of quarter. the year-over-year more payments in Prolaris year. cancer which on implementation a run $X.X the in begin did health, for quarter was by was by revenue product. anticipated million Excluding in revenue to year-over-year Test significant volumes pricing Medicare year-over-year. $XX XX.X year. X% year-over-year. We We of declined detail pricing establishment testing move XX% in of period the quarter positioned LCD, our one-time rate XXXX, testing $X million other the effect was area Vectra prenatal based on the prostate perspective, the by the quarter XX X.X declined in In X% of of XX%. year-over-year. rheumatoid new later as flat volumes arthritis impact GeneSight, as revenue see the CDx to revenue In in research in Prolaris approximately pricing the we in August a prices XX.X on in versus following prenatal flat this year XX% improving selling the average From million increased volumes factors discuss and and diagnostic last a Autoimmune call. into declined the are million

quarters. to in We are not anticipating revenue of this persist future level

XX.X margins in the take for XXX.X upon million Total to cost metrics So year our under cost compared of of operating management. XXX On million. your based financial account sequential better of gross for would increased and basis please $XX stable quarter XXX.X a expenses million. the sequentially were quarter. by into Adjusted million better last the expenses adjusted now XX.X% discuss model. in million I and our absorption, quarter to relatively expectation total points increased this pricing decline fixed were approximately September basis, XX.X a like

million cost in for in We customer of higher and partially investments technology, December. that upon will than experience, to They of take our annualized approximately our an share marketing, expenses. of evaluation per have effect other lower initiatives completed and expenses were by strategic cost critical a reduction. information more These revenue in based anticipated quarter are $X.XX be initial strategy. offset Adjusted and than have identified million savings $XX earnings starting $XX the loss will

adjustment non-GAAP associated we we share, period as financials decision made well. fully to impacted amortization adjusted change our this as negatively for we the add-back earnings in the taxed prior make where This $X.XX. a methodology per intangible earnings of of assets quarter, And calculating will by acquisitions. we quarter This with report

of impact million our the $X.XX. applied in the fiscal the XXXX. the cash the guidance We June, not pandemic, which For fiscal The uncertainty ended the with equivalent. credit $XXX cash ended been on six and reference, to year to the period the total million have end year start outstanding would change a of to we transition Due prior changed December facility months with will for are quarter associated XXXX. this $XXX and quarter, coronavirus when providing

December From seen milestone $X COVID-XX revenues impact this quarter. of CDx expenses in anticipate months become not modestly payments in year. standpoint, increase of nine expense increase first our $XX volume repeated basis. over on the phased total a be quarter relative tied of will in million to to research following cases. In of a cost to The We sequential we of will operating and million an be the and annualized next impactful quarter, have levels in September more approximately reductions will half trends next the flattening the myChoice

with discuss recent of I’d to health like have unit. catalysts we business the Now our seen business some women’s beginning

wins, saw into pricing which This several our should for prenatal translate higher tests. quarter, reimbursement key we

first important This American was is test recommendation comprised volume of these for all recommending the of Gynecology prenatal noninvasive change prequel And an by guideline women. resulted The often as average of over samples was College screening risk the half pregnant in pays. zero women.

is this which women technology, amplified prenatal as So expected coupled a volume guidelines. payers launch our highly accurate of more with allows This positive growth. should receive to to average invasive prices selling impact the proprietary adopt improve procedures, and have these on avoid screening test tests decision

five decision Evidence affiliate policy Blue Blue technical from have Additionally, seen our plans, Blue commercial is the contract Shield Blue we update assessment their Blue approximately of rates. Cross than Shield the policy carrier Association this already a Cross medical positive lives, new XX% our code medical Blue Street we Cross expanded screening Evidence follow Shield who expanded Typically, on saw reflect current to comprise carrier Street, higher organization, screening Association pricing for decision.

So prenatal time. over this impact favorably average prices selling could

our would like Health discuss I Mental Next, business. to

quarter, we the on This X. which effect LCD August received final took GeneSight, for

flat improved pricing lower overall June new the led establishment average and selling of to test the to quarter, a recruitment excluding per basis, relative prices reserve. the payer the is While on the coverage

unit, we significant diagnostic Moving have with our companion on to business our Oncology made progress tests.

Joint in following myChoice also highlight With for companion G-BA receive next companion to calendar this recently the prostate samples would breast CDx reimbursement October regulatory base to from user year. we indications believe our for cancer. and ability I calendar late of EndoPredict forward. pancreatic clients we started CDx, year. of new also EndoPredict cancer has going will elaborate for Committee confident we next the tests approval Federal a of approved the and with at in German approval be BRACAnalysis be diagnostic in or as this revenues to our have diagnostic important reimbursement are Germany, tests in driver that in an increase expected start Japan fall. Japan, regulatory EndoPredict in myChoice of growth CDx biggest We increasingly used Germany consequently, received Overall,

corporate like made shareholders. have governance Finally, with emphasize recent to we would following I improvements discussions

information new two-thirds managed Following be fresh areas will bringing meeting industry of development December, product in and new, our our care, in board perspectives and annual experience members like technology.

We have that shareholder it realigned compensation to executive matches interest. ensure

bonus and operating to team. Now is income tied our of share achieving compensation for performance-based total shares are objectives XX% earnings directly and tied revenue XX% objectives. per targets executive shareholder return And of to shares

year. We calendar will our transition to period six fiscal year realigned have have a December with the Consequently, XX, also coincide XXXX. we month ending

strong XXXX Our fiscal year. changes the begins example as reflecting over through positioned calendar like best and of that year on the shareholders Based now and significant are closing made governance, Paul an to I of runs would back practices XXXX other by industry Myriad structures new corporate and for to interest January the the aligned turn is remarks. board, constituents. the call incentive with now X,

Paul Diaz

Bryan. Again, Thanks we transformation early our journey. are in of the stages

to accountability. As and we move committed forward, transparency we increasing are

and dashboard on expansion teammate efficiency, bottom culture our management the our of and and patient and Our mission, top and productivity, line safety the of strength will focus excellence, growth. innovation, service engagement,

energized our and the at mission our of we As by improve XX-year people do. excited. it back It to I come lives. and want are to transform heart I to is wrap I’m up, everything

to you turn work Our you Scott coming back forward to look today sharing we’re We’ve attention off your Thank of your with lot questions. us, solid but and to in customers more time for start, for I and of it I’ll front got win. want to a and calls. us the a in

Scott Gleason

Paul. Thanks,

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

we’re session, Q&A the ready now today’s and to follow-up. our Q&A for we’re Q&A one participants call. Operator, To asking ready we’re begin ask one only Now, please participation of ensure the broad portion session. to in question

Operator

and with you. from comes question Certainly, the [Operator First Schenkel thank of Instructions] Doug Cowen. line

is line Your open.

Doug Schenkel

you Hey, good Appreciate taking afternoon, guys. questions. the

point RBM conclusion? there think So maybe just derm strategic other At these contemplated? changes that the future? where at that, the building still the be businesses. assessment were a of that’ll do expect that reach you for And would then foreseeable today; to strategic timeline for to Paul what the that is start of being announced kind suggest on off is this and are point the the of portfolio that of kind fact Or does the point it you two at

Paul Diaz

in we board as evaluating all look, with we moving and team as in and about Well, other part talk of our reviews of plan. contexts. were operating strategic clear units, Thanks. promised, and business our our of management engaging myPath pretty that forward this It us RBM to our and we’ll some are strategic not unit the our the all products, became long-term

are with forward with we strategic moving so, alternatives both those And of products.

of few and we’re timing go-forward continue complete process. So able the but shouldn’t timelines earlier, as number this is And engaged the ambiguity last the a have certainly ways transformation we as achieve. hopefully we into referred finding help suggest and talked our quickly of we we valuation Bain weeks deep we’ll reviews. intended The the by along dive. I the and We’ve plan. to and different sense better. you And into better next what perform XX those The of as Avalere to us ambiguity are be sort kind only to to But we’ll on over March, to of months that way, execute will a a about in any possible, be call, to update that. as close are there

I’ve and of to. of come highlight kind to presentation back And in some tried the can those we

Doug Schenkel

a a you that’s Okay. Obviously, thank that. in quick lot short a great, progress just made period for of Maybe unrelated No, for of and Paul, time. follow-up.

account, of that to share levels this analyze last trends your XX% point, When back by at is that do HCT which position existing you this volume really from pretty that in on you Bryan point stable? to position of in think at nice XX%, that you at his this indicated think is prepared and your point year. think recovery, is And the was also volume stable? in accounts back is do that I what’s indicative going getting market, share a assign really remarks

Paul Diaz

Well, I are stable, stable position say think our share is would nothing the in environment is we there but operating that in. I

and ever new But quite and I but have on Bryan the pleased execute consequence COVID cases the what like. healthcare recovery, We’re and two some at think off Quite happening as system, to referred and couple to, quarters me hospitalizations and level we we’re I things about plan. think look going are intend again. pause reduction we I the our of cost our some as sort COVID from grow a this seen, commercial and and the in rest here. to spike talk pre-COVID sales baseline what’s of quarter, new of to new our after peers frankly, the in This next seen of will levels strategies have recent be is about of gives build as going the don’t quarters next choppy models,

be second that. directionally and unpredictable think to thinking good we come how as prepared next all to the we’re likely next for together, the I So year. about we But feeling pretty two about be quarters are want of started will particularly going half this

Doug Schenkel

Okay.

Bryan Riggsbee

is think seeing when one it’s the what physician’s to there would I an in that Hey, average of that you’re that you add talk we’re sort number. – is XX%, offices thing probably I Doug, about

preventive on a see bit and elective a oncology and recovery side, little that where back little are you You’re see as to not on patients. level below visits still the performance better affected probably probably side, seeing the care the you

there’s a in that’s a total. split there, we’re but where bit of So at

Paul Diaz

this and Brilliant. and underperforming one which in are digging to do really of And environment sales who just our folks environment more into of and trying more our which the to the how I’ll add of this figure performing we’re teams latter. former in are are out less thing,

better we everyone’s but and to at better quickly. how backdrop how we’re so pleased execute is murky. are the – think working the And at and but pleased I’m And performance, everyone there and finding opportunities opportunities hard we’re really embracing drive change is

Doug Schenkel

guys. again, Thanks

Paul Diaz

Thanks, Doug.

Operator

next with comes Steve from question Our Unger Needham.

Your open. line is

Paul Diaz

Steve. Hi,

Steve Unger

Two Hi. questions Thanks. really. Great.

last cost more the bit savings, far that’s And on wanted Just could us deploying how where color on and more little give understand you driven focus I on sales how to that a you talk been Myriad as reps And touch – to about particularly is? lot marketing. the question technology where heavy as force. your a you’re has impacts

Bryan Riggsbee

focusing nature historically Yes, we do the have less how thanks, marketing what more other about it Steve. where – and been I – we overall really in. and looking in and on in area we’ve alluded been I’ll area. think to how intensive of the of have performance chime sales that’s taking a don’t costs areas terms areas looked And earlier start gain and I the as would really been the relative say is there size – that really given to relative performance And think we would it’s and digital a on, has perhaps be to holistic I bit around infrastructure little selling how action say those seeing focused Paul total, evolves aren’t those in some at can Paul of our some and can we across and review, been focus cost business to of any to try certainly efficiency we time in can, the technology. in to this where over focus

time. I a has business. our costs cost over review really every period of touched – area longer out that play holistic that’ll our So of the just would and been say

Paul Diaz

here we’re lot team talented that. would in And but of months. tools enable few a – we’ve of out and the under invested patients Yes. has The last in the work are been look, salespeople physicians different a over we’ve just doing today, and world I got a to add, and way, in engaging different a lot

to to people and X.X I little if just an a to So bit of of eliminate the And conversion in of million we’re the that’s that quiz will I tried in that opportunity. conversion. you kind taking the test, cancer get a presentation a trying on referral a lot referenced the hereditary the highlight only engagement, a digital friction the

empower direct-to-consumer. And great to and our work so think this to them way to physicians tools a opportunity working today. enable the more with that And the that force I are we there’s want as remotely, serves sales

to these build lean work happening pretty our have we’re again, shout capabilities and teams excited all happening share great into opportunity. others, that. some and it’s that We But to and to about tech quickly there’s out market

Bryan isn’t terms of And that prove have everything make to itself getting so I on that’s sure taking And a to do said, of that table the costs an that organization think to on ROI. aren’t has any and there we that – look hard OpEx. at as we’re the everything’s ROI the in area

Steve Unger

review, tests current know mental there? franchise, are plan And other the as you – then you build to to your expecting GeneSight health? early do to you And other envision, than it’s mental the and follow-up, in continue are I just the health strategic as potentially in selling with force far sales

Paul Diaz

there franchise taken advantage have opportunity the mental and we executed haven’t dynamics a market Well, in given we and that of on. an health,

digital performance on from to model sales historic there as through quarters there, that. embrace I our heavy-focused level a embracing more rep again, think couple manage to the digitally-enabled hard, tools. issues And the have – starting question, in of is some your the not worked to things. LCD we’re reduced there team traction tools so of GeneSight of the so new with and of of lead these some the sales are next sort we rep some that did we’ve sales new good. and model, we there. execution get are teams the but and of we’ll The Mark replaced investment move a have first and far expectation consumer-centric, And position and need other reps on to the higher yes, we part But in both through we’re So that working

Steve Unger

Got you. Thank it. Great.

Paul Diaz

Sure.

Operator

question [Operator from Instructions] Tycho Next with comes Peterson JPMorgan.

open. is line Your

Paul Diaz

Hi, Tycho.

Tycho Peterson

XX, thinking to pricing, bit those? you good GeneSight should pricing down each the in cycle with little pricing XX, we XX. be about just you And how going Hey, Can like where on I’d down of are a hereditary down talk forward? we think vector about for afternoon. start

Bryan Riggsbee

first just I Yes, comments. And a couple different. is of of one think every of all, those

that I some in I X% think saw in you terms would down stabilization say seen from quarter, hereditary, we’ve there. of the

really recall expect this significant prenatal quarter at we the the impact I December we last where a that the forward. might we this as look lap year quarter products, transition As the was you billing would we had from was that think that go

a look obviously year-over-year. headwind we that’s at it So big when

other products of and and rev each is, things have both that have once Paul and we zero you get believe think how like in the parts opportunity to focus would that their improvement that revenue cycle different path other time. in improvements I and making with have the stable, narrative. towards are and pays over a say make improvements some singular and I to area make I equation a our So cycle, of own there’s What that we around can then

Paul Diaz

a Yes. is And and this around to government I been are big again, identified, nuanced amount of with I are would weeks, surprise interactions add, there lot with of others, there Tycho, sort operational but issues, of a The mean, commercial terms issue. a self-inflicted me. negotiations XX just – pay. in as payers of from no has to no rev cycle issues Brian look, conversion the pays very and

ASP. really that so And affects

few are, dig a And we we weeks to again, better can on so that. starting execute how really in into and just

significant. review couple the in of pricing regime a be think and be. expect and could influence in volume more volume the in ability – is continued we and to quarters, macro we’ll next our think to with over drive doing strategy I P&L next years. think the the our along Avalere pricing leverage few our pricing further I stable on Bain pricing pressure we’re consulting But see as and and a see I strategy through But event more what growth, with our

again, it. leverage little a we some our time in to see of P&L and leverage that, but we’re you to it’s lot quarter has us saw work pricing, to so early here, So, take stabilize – here do that through opportunities more going this a

Tycho Peterson

of near-term, volume. we much color of think we on said recapture exited be you you’d provide demand? XX% last Okay. pre-COVID in back And about cases up new on back to then about the October quarter, going think was if had again? as above you came go November and And I overall. XX% to kind that any of willing you And How versus obviously at that about

Paul Diaz

we GeneSight. it’s GeneSight, combination. mean like ordering physicians I saw new think X,XXX in I –

they’ve talked there, of tools physicians pivot And so home-based this. our of telehealth, have more to had in these early that I our sales more in there adopting early the out innings kits again, the seeing we’re innings adopting but access physicians I about are more movement gotten and to aggressively, teams new now think and great again offices.

say quarters. the said the several expect improvement of I flattening I and any And So, quarters, think seeing to level we’ll that what this from as earlier, next current COVID now. we’re of headwinds the have if the sort seeing I in about over the we’re modest across country more next right given couple would

Tycho Peterson

Thank Okay. you.

Paul Diaz

you. Thank

Operator

Leerink. Next question comes SVB Puneet from Souda with

line Your open. is

Puneet Souda

Paul. for Thanks Hi, question. the

rep the COVID here, where can surgeons a we’re a not is one, and the are that happening you’re the a just the first currently, maybe bit of I finding given mean, rep appreciate little stands access us Maybe a So, in the more businesses. looking weeks access sales that and given on which are versus better timing, terms cancer, just in rep still. across few oncology especially areas end virtual others. is where of and give robust access as calls sense end, seeing you’re – markets number of you the the sales

then us maybe sense And give follow-up. So a just I had a there.

Paul Diaz

get you different trying give of XX think to I here minutes kind products. the think it’s different I geographies it’s because I of and – different well. Yes, as We’d that, at I be all honestly, across can’t a sense all of

is I trends a and we’re people trying accelerate offline. different and point to physician can but I new there. order terms I’m that across to if we’re progress adapt mean, give The I help across not world we you groups. our those maybe in is more of making can sure of are to more of it color model. that think much all So you important continuing varied products telehealth fronts, home-based across kits, try to and

Puneet Souda

one us you have that maybe past change. and other have in you direct-to-consumer you, to role again see you um, in advertising. the I is, then, And Yes. you where DTC Okay. about DTC that driven question something talk as well employed have could what’s are of companies Maybe

increase other So the wondering, you in seeing how forward. and products and an view spend GeneSight spend we’re just overall for DTC on that the DTC for going

Paul Diaz

mentioned, those that areas trying the facilitate as we’ve of and behind low mean, no of we’re on of of And you in So, we’ve is the of, And teammates and some people as I we’re to the reductions, well just of in to million physician I to that Hereditary and from telehealth sure facilitate to groups hard unit of closer services flattening entry fruit our redeployment we’re Bryan that portal, of this were aligning that Cancer the slides some and the and support to that is things some give looking to other support that providers care over the that But at million my reduced I of made taking, at, you operator. is organization our corporate and order to in of pays, some taking resources. mean, million look, essentially expenses can protecting about products. the savings A I at reduce tried lot an to layers and accumulate explode. $XX hanging the with a I’m examples years. able IT a head as and and we’re just looking more business. reposition quiz. $XX the represents those to this And investment business got there’s be places. collaborate – make stuff, out looked there, lot XX

so into figure seems leads like conversion, than And and to use time. me better we a qualified great of out resource X.X% convert, how XXX,XXX a to

our oncology significant of I why are are broader those a health. and our and lot of there believe about part a very patients. out but effort, tackling really we hard look we’re genetic we us we’ve so And opportunities that So across go blocking your for direct-to-consumer to question, deployed reaching in areas. think, back number counselors of excited And, taking right health, drive mental women’s to to and portfolio it’s to that’s a now, to those back

Puneet Souda

I And advertising meant what going spend but maybe on I that’s didn’t that, clarify direct-to-consumer, is observing. we that were GeneSight, up

out that’s it fair moderate.? that, closely were that pointed looking you to expect going as So you is to is and something at

Paul Diaz

direct-to-physician, we just I said wise help health And investments, we’re make do we – to think sure direct-to-consumer, but this, significant a we are out a believe on model pharmacy us believe believe sales leveraging opportunities strategy. to move Bain’s again, more make for how there rep through We influencers to away to across but to expertise based figure that. still I are us of preliminarily this. trying to there we’re a care from digital working

weeks examination, And we’re in product XX you think into that really but investment all I our expect across direct-to-consumer more so lines. of should

Puneet Souda

you. great. That’s Okay. Thank appreciate I that.

Paul Diaz

Sure.

Operator

next comes Bruin Our your of with Derik question Bank de from open. line America, is

Derik de Bruin

good questions. Couple Hi, of afternoon.

exclude growth including the of your of back ago peers you’re I put company that into company not the to do is this, the comp and established calculation? Forgive going couple to I’ve are emerging established going most continue if in made and is it mean, me EPS normally back space. since years to the start, just but stock-based fact numbers into good. given with an company, decision I’m company the to your a if diagnostic wondering missed that you a

Paul Diaz

talked we’ve something about. not is That

a more and taking I calculation our things. this of saw think of EPS, how more conservative a to other and in you feedback we different financials, on try create steps position visibility number our quarter, clarity adjusted to in reserves took on took the

in So, how better at to one accountant, contemplated can that’s good but a I of and at point. everything. I But we but discussed at to I another to we’ve not active, mean, issue, be here. pretty this look that I’m a we’ll trying do not look look continue used something or at Bryan take engaged We’ll are

Derik de Bruin

samples I’m analyzed. Great. And the the correctly coming I understand samples, just just wondering, back one the U.S. on and follow-up, Japan. expansion and interesting business comments in I the are obviously transporting are CDx – the with is be there there this that issues you Japan in growth mean, the that if deal to of or there any problem? sort of sort to mean, lab are be prevent trade of million[ph] any establishing like this and a thinking I to samples a to

Paul Diaz

That’s That’s is world our all Lake the The kit we are the to and, where looking at come of capabilities. the automation and technology out moving. try comes Salt more to leverage No. based in. fulfillment international to And do in. of investments extent, operations business where

predictions in on places. Japan more some excited a in we’re but Germany not the that well not you very that comment we’re we’ve got that things we traction we’re about mean. We’ll P&L, seen we through bodes what the we ahead what seeing it those like necessary I early. know are businesses So map. ourselves in given of for elsewhere. I’ve to and of terms And in job not comes here mean, But Southeast we it’s think of again, Japan. a that pins opportunities are of more getting couple might of about when good going actually progress And better other it’s some Asia there putting opportunities of just the other growth in and one and think logistic on and and do just things a in let

Derik de Bruin

you. Thank Okay.

Paul Diaz

Sure.

Operator

will for one time which have Nephron. from Meehan Jack come last question, we And from

Your line is open.

Jack Meehan

Good afternoon. Thank you.

the much RBM So back bogey $XX good looking million they how the year a for potential you did sales day, last the two is divest, businesses, you’re in paid in that for to proceeds? which profitability and generate

Bryan Riggsbee

dramatically it’s a of think will either pretty use get get that of dilution, estimated expect it that any Jack, proceeds today on a at to has net here ability our execute And our importantly, shareholders in for most and we’ll the and positive thing and the again we company company. proceeds, we’re valuation complexity that comment the from the to of for in the not way gotten they really asset in for a focused this on. good or drive organic be but to mature These what can’t and growth. net we we’re accretion, just the support there’s of need we interest lot be going them that’s But, the proceeds RBM, teams of supportive. in way that And those assets but additive, just stage. to into aren’t – great transactions,

to place and owe those value realize shareholders present So it the we it to where to thrive and reinvest we think proceeds, both different assets in team that we a and owe win. we will actually can the

Jack Meehan

looking need Got you you XX financial get to And no, the do quarter take? covenants? in March, at the in it. the to if I hit was do million December have covenants And actions breakeven two ended and expect when a you XX-Q, those what in some then to quarters

Bryan Riggsbee

really COVID think that, the it we the Jack. as the Yes, any for I we notes making the throughout And that relative characterization guidance haven’t period any we uncertainties mean, where position, were what thanks a debt to guidance. you question, regarding given Yes, I to any think what in said the feel future of position and in quarters. relates but given weren’t zero, we’re like good at comments we made of our I almost forward like. think sheet we’re balance we looks even haven’t when at look I a almost from period net

Paul Diaz

all to get not of a This we’ve and when covenant lenders, We’ll just with and we through worked already debt. I’ve dialogue great Yes. just switch we and of through new in losing lot scenario the my got lenders. something one. the we again, issues the is a a not dialogue line for work we’re over we’ve had And restructurings good our lifetime, sleep many case this is off that point. pay with worst

Jack Meehan

Paul. Thanks,

Operator

I you. it turn conclude remarks. to Q&A And Gleason, the session. that Thank closing yourself Mr. back does for will

Scott Gleason

the for your joining appreciate today. us you call Thank And on we participation.

Paul Diaz

everybody. Thanks

Operator

all call participation. your that much And for today. thank conference does you very We conclude the for

As you line. please your disconnect

Myriad Genetics (MYGN) 9 Nov 202021 Q1 Earnings call transcript