MYGN - Earnings call transcript Q1 2022

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Operator

Greetings and welcome to the Myriad Genetics First Quarter 2022 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] As a reminder, this call is being recorded today Thursday, May 5 2022. I'd now like to turn the call over to Nathan Smith, Senior Vice President of Investor Relations. ahead. go Please

Nathan Smith

you Myriad Thank afternoon welcome and All first Dave. quarter the Genetics XXXX to right. Good earnings call.

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

Our Investor Form and quarterly Relations website investor.myriad.com. and can on Senior Smith, our X-K I'm on Treasury. earnings Nathan issued found Vice morning was at release this be President of

Financial Bryan live Officer; can Diaz, call Nicole our are President in Riggsbee, section our with our a Executive Chief be at the the Chief Chief On our of archived and Paul website. Officer; and call Lambert, will Operating via me and This be recording Investors investor.myriad.com today Officer. webcast heard

on on some section note or of In events website. These the Please the statements reasons. We the adversely documents for the and of other time our of future or addition, variety management's may with financial differ time the actual a be future from Investors forward-looking the from you Commission. these the are to following of and files contain that call, may results current Exchange the presented refer slide information performance today the materially based presentation to or regarding expectations events and projections company. company Securities expectations statements available the will

time documents our Paul. With on Specifically, now from actual the These company's risk could and I contained forward-looking those projections important XX-Q Form reports current to to the or statements. XX-K, report it's on results on quarterly annual materially cause X-K. turn identify will transition factors it's differ reports over Form in that Form the that

Paul Diaz

discuss on afternoon we thank along strategic On today's updates transformation Good from growth and us. the will joining you our Nathan. for QX and highlights with results and plan. call, quarter everyone our Thanks

exciting Myriad partners teammates dedication want and improving and this thank well-being our Genetics implementation of hard quarter. our to the provider As for all us. healthcare all. plan. to their trust began execute with XXXX for for our long-term I continue continued always, also be transformation I profitability want in their growth, year advance an their the and thank and we Last health patients laying ongoing work and mission year to we of sustainable of innovation to foundation and as our growth for the will

Now taking expertise to long-standing plan expect and and coupled with emerging XXXX beyond. form into commercial capabilities, growth is our scientific and we technology accelerate

year-over-year experience millions variants last year of first in more and systems We the have Despite to continued test of Average year-over-year care. user combine diagnostic of revenue aligning operating quarterly quarter billing year, data a our $XXX.X were part weeks compared financial help maintaining made the plan in been to by in of quarter COVID-XX management $XXX vendors. The seven other and strong stable in data and manage first allowing the using and responsibilities strong in and patient’s, businesses. to of is partners, teams, $X and test success demonstrating expenses the were Total increased million. for million results $XX reimbursement of and the ASP expenses year majority seamless clinical increased XX% our across adjusted billing individuals its last payer ASP to growth the markets revenue XXX opportunity quarter, us operating We X% external in revenues reflection XXXX. an plan. in of and stable quarter medical diagnostic operating million internally to our from for our In better our execution cycle XXX,XXX investments quarter and payers reach to payer perform consecutive cycle compliance policies. six over management quarters. during revenue XX% $XXX.X authorization results the our This more core per authorization our commitment prior and employ presented year-over-year, a increased our decreased the to and growth of due with representing growth and last volumes to of million health million, to patients, versus challenges has create sets decreasing

adjusted first GAAP in year-over-year. operating was compared GAAP no per $X.XX million $XX.X $X.XX improved to with $X.X $X.XX last million cash year $XX.X debt. million. million with year, ended loss long-term last approximately and the of the quarter improved $X.XX improving and equivalents We in to cash, loss adjusted share loss Our and quarter of $XXX operating share compared loss per of an investments

in the backgrounds. challenges guidance half the as financial delayed routine screening, our our to both we we viewed with quarter more visited and and first, Myriad working develop remains and to are differentiated a our and underpinned increasingly otherwise products, XXXX transformation our While providers trusted limited hereditary benefits strategic both reflects reach specialized of of confidence services priorities: clear well the women profitability less, best-in-class as access first provider, is of patients face in expertise, accessibility the is as plan. all by our as cancer particularly long-term patients, and our their to business, unchanged to doctors path three

leverage are size enterprise and to scale accelerate our growth new building capabilities we Second, including opportunities, market to new M&A. and capture

a set drive execution, focused to deliver key we we flow growth, Third, mission, our generation. fulfill long-term profitability disciplined on and free cash initiatives work as to of are on

create the and We continue on are to beyond. about priorities progress they make and excited in XXXX opportunities these

profiling March we molecular test. Precise Tumor, tumor launched our successfully have in announced As

to ordering of to seen a announced health for Tumor test opposed getting of a and providers. from from a Precise with week, Solutions is a patient market many care our our we expansion providers to determine of and to a single Solutions, Precise different profiling new an helps myChoice test hereditary providing Solutions tests, partnership with tests. This this new a single with our myRisk eliminates for germline to options report less hereditary have alternative to Oncology many lab. treatment for platform. providers companion multiple Genomics, for Precision diagnostic cancer Precision DNA of liquid our selection by Oncology companion And biopsies, Solutions the it add comprehensive a Compared diagnostic response our tests Myriad in offerings separately, traces cancer test, strong the cancer biopsy technology tests specialized XXXX. biopsy including quicker, an Oncology Precise Earlier need best plans patients, tumor We by order the oncologists CDx by treatment TSOXXX Powered part Illumina's suite selection. Intermountain with processed as analyze to can Intermountain tissue blood, therapy invasive, Precise prefer platform in Oncology oncologists testing often liquid because standard provide Genomics, Precise

can test. be TSOXXX processed added support to will utilization with biopsy the this biopsy out is offering option For platform. many portfolio, more to prostate in test and we consumer tumor our With used and tumor providing Myriad therapy tissue rounds single growing circulating targeted selection and have a biopsy new by a all use liquid biopsy such selection when and it care as is also patients, needed insights for anticipate liquid the treatment and pancreatic be portfolio testing cancer. expansion where data to oncology sampling areas guide driven will proven breast, test unfeasible patients and capabilities, of to product technology of Illumina therapy will We liquid interpret our liquid of experience ordering have of The hereditary easy with continue advanced oncologists the Intermountain initial Genomics. the biopsy cancers, Precision necessary ovarian, already results, be strong The Genetics addition test decisions. liquid

us health best From to the perspective, care and excited MRD emerging all many including to patient. exploring test are four have developing opportunity we are to that MRD current range high-level with enter technologies have plans an spoken testing. providers. Myriad about workflow, serves and Myriad we an is individual test a a For market the we MRD in for gives M&A, share needs with you our MRD commercial currently current internally. the options, operating current coupled of now, test steps that market-leading that capabilities, a a of our there After are to tailored

DNA first occur prior steps specifically, two found identifying surgical the tumor. The variants in to patient's and removal the patient's tumor of

occur of cell-free via after myChoice and many surgery FDA-approved times to patient's involve They the of be CDx we plasma steps to possess for clinical search The original sequencing tumor. DNA Importantly variants with from capability repeated the our monitor companion tumor. already and from the the steps perform original diagnostic two to can the reappearance final scale. at-production test precision these reoccurrence

to in market-leading and our our to prenatal many of in-house technology with tools leverage tools this can amplified have we fraction year. steps DNA the confidence Having our proprietary MRD than prenatal performance gives two capture cell-free our create to an specifically comprehensive of ability paired capability. from test in final competitors hope test capabilities the with to paid a other gen technology commercial first our products MRD next these these engine For launch we early us developed acquire our that own robust our prenatal and the offering test create screening at powering cost

to validation Officer; detail. simultaneously in We in that, With Operating more follow. our for expect clinical Nicole I'd to pharma things to results new operating product partners launch an discuss and data turn for we MRD over to needed Chief commercial our product Lambert, XXXX, to Nicole? QX a innovations while like gather

Nicole Lambert

medical performances our continues lasting Thank most other treatment unit. their depression mental health unit illnesses. are to suffering the determining anxiety, review common ADHD core medications in a you starting fail It's on mental to when error effective my a of Paul. and US receive have as to patients and families those and the variety pleasure Trial with proper to Mental effect business reasons. illness business for treat our

more lifetimes this contribute that have than to research four right diagnosed tried in their those in Negative to surrounding illness medications find half the more shows effort mental problem. Our an with or stigma one. of depression also

they survey Monitor were to recently diagnosed GeneSight the know surveyed more treatment that anyone women of want or they because nationwide depression revealed than with Health not did that delayed Mental never Our struggling. anxiety thought or half

antidepressants year-over-year reported weeks $XX.X quarter. XXXX volume in tests of first to increase of XX% million of in GeneSight the revenue challenges X,XXXX roughly report industry-wide processed Mental quarter levels one for XXXX, Health our highest in patients health of and Our six affect drugs patient's business swab privacy by GeneSight better GeneSight the how other home. a will understand physicians their by unit of taken this Driven with simple in addresses be Health that mental can Psychotropic own Mental cheek the presented test helping overcame ever. business The crisis the the an first its

ordering as our We are performance new the capabilities the demonstrates language all ancestries. sales for based past initiatives additional digital commercial we over Last We from key clinical launched on to considerations task test marketing X.X drug encouraged certain by clinicians. launched we health our effectiveness this genes. update medications GeneSight phenotype customer-centric Hereditary of believe feedback with year we recently women's risk year. includes business. categorization GeneSight revised Cancer featuring our implemented Psychotropic that to and The it for and myRisk updates the improved Shifting or strategies

recently for health among only The for when with women in of over equity by reflects validated those the to assessment by new Genetics X-year companies Myriad innovative was including XXXX. cancer our commitment launching ancestry. first non-European breast with most named risk women This Since it and XXX,XXX lifetime myRisk personalized Fast research Company and world's scientific who non-European capability ancestries cited can and all backgrounds of breast tens have genetic mutation to insights for critical helped women have from likely not the cancer all do women an insights With cancer need get we hereditary from cancer help increased of where with risk thousands clinicians score testing. treat that risk genes. the risk one they identifiable gain of in breast

test. myRisk unique a select our provides through access are volumes launch virtual XX% it a counselor order were partnership service who to the process provides service partnership Medical additional ordering because patient's a roughly end-to-end with genome with those recent for the Geno allows journey. test increase live excited to Reported for also is Health partnership as who their guide In our through Myriad to This in home genetic support access to patients test We about designed our a to patients it a them This well. year-over-year. from services of may care own and patients only XXX,XXX. the business revenue and need Genetics it support increase the quarter, reported effortless medical adviser not access first million myRisk this $XX.X ability is a Women's also but chat

Hereditary including presented challenges cancer constraints variance volumes staffing and by in-person the were physician adversely office COVID-XX by affected visits. and fewer

saw prenatal revenues with our also We in year. growth up the in compared to quarter portfolio strong XX% last

to proactive Our be their care. about allow patients products prenatal health

Amplify opt-in default five Our offer than a basis with Prequel of screen an patients. more technology to syndromes. provides the prenatal We on for microdeletion common screening as XX.X% microdeletion not results

we carrier addition, to pregnancy. during undergo the In first screen combined and be only next to year. non-invasive expected prenatal both our continue screen and early three patients test launch gene, available one progress screening prenatal towards Today of non-invasive in which carrier screening is

from for patients tests might new or need get one maternal services offering will these to services simplifying Prequel. bring combines and otherwise our access answers The foresight industry-leading draw. into they portfolio and the of complement who single easier FirstGene screening blood it prenatal patients that to the process not making one

Moving which delivered volumes the business on first oncology were test for to $XX.X roughly our XX,XXX. in Reported unit million quarter. revenue

myChoice As of tumor that as test TSO oncology test, a molecular this by our myRisk germline combine Illumina's profiling diagnostic of test for precise Myriad profiling suite Paul past tumor solutions Precise powered Tumor technology. hereditary we and launched mentioned March Genetics XXX part cancer companion

about precise partnership liquid liquid further therapy excited expanding are We to tool. selection this biopsy a offer even

services. companion the is sequencing these diagnostics, oncology With testing world-class Genetics power precision and solutions, germline Myriad by new super next-gen advancing of merging

invest germline test to launching myRisk in offering of content April our this in gene continue year. new We

diagnostic BRACAnalysis cancer by in as treatment received FDA a Lynparza only approved myRisk as BRACAnalysis FDA it high-risk -- cancer. Myriad's in approval germline diagnostic early-stage breast HERX-negative the of test making addition sorry, companion treatment In CDx use Myriad's CDx test March the a companion with breast early-stage for for

an are administered of the prostate monthly designed March. all-time about for test on excited Prolaris success hit We high cancer prostate continued cancer assess test prognostic past is market our The to Prolaris which this aggressiveness to turn how detail. our only discuss results more the fast that now QX is growing. the test it are financial to would over tumors measures Bryan and I in to like prostate

Bryan Riggsbee

reported million divested from Thank to excluding financial by revenue you, year like XX% another of total year-over-year We with highlights. our as began would Nicole. I $XXX.X the start reviewing quarter up we revenue strong assets.

the driven by volumes, divested the excluding Our compared which after despite six quarter quarterly diagnostic in first by results in weeks brought to of were assets. last test XX% headwinds COVID-XX stable on year experience increased

our margin quarter, $XXX growth component see been and plan. In $X.XX Adjusted a reported we and major our $X.XX addition, collections of adjusted In we first and execution ASP cycle cash driven better-than-expected gross expenses an year-over-year. selling the of per average prior loss share by were operating which million. orders was businesses. transformation period adjusted improving continue prices XX.X% management, from revenue across our has in to on improved on was stability improving The

this during that those for team disruptive have due expenses to supply increased XXXX. as operating We to out the on operating and time staffing costs pace we due increased cost global help to exit various material successfully to managed inflationary increases. for targets quarter hit did expense our laid mitigate competition increased constraints has as well cost talent labor pressures disruptions. chain We The experienced

ASP cash and $XXX.X came collections During volumes within first quarter prior the from projections of $XX was stable. on Overall, organic $XXX,XXX quarter in of for benefited our in periods. million million revenue of ordered original the better-than-expected tests

increased divested compared year assets. performance, product excluding of XX% test and quarter QX to from from after volumes sequentially X% at volumes last last total QX Looking increased

divested core These X% revenue weaker from year-over-year revenue in growth in first sequentially. demonstrate typically and trends. increased and despite businesses, QX XX% results Excluding strong headwinds seasonal total the business COVID quarter

to Turning product. revenue by

cancer quarter Hereditary million, X% first in compared the year. of was decrease to quarter the last of first revenue a $XX.X

and first its the the hit the by testing six hardest in quarter. weeks Our was business hereditary COVID-XX of cancer variance

flat Amplified works that with annual quarter, reduce year-over-year exited perform performance technology growth, $XX.X our noninvasive have out may our the the in XX,XXX, year-over-year enhances mental a avoid XXXX. unnecessary HRD and would year-over-year first we quarter increased proprietary Prolaris of XX% when quarter quarter prenatal test record-breaking first sequentially. access million, March. rates the test of by volume increase the sequential the which test in Mental that quarter disruptions XX% sequentially. significantly prior challenges X% cancer the year-over-year tests mentioned, double-digit of quarter myChoice deductible And delivered negatively revenue resets Contributing for well X% patients and to ASP by Health the oncology, primarily to in and decreased our and by testing year an was increased was XX% XX% first staffing that screening Prequel hereditary health factor Prenatal and volumes impacted volumes Nicole same As and of to failure procedures. growth. as X% driven we fourth continued during sequentially, In quarter year-over-year the constraints and revenue revenue number to X% compared so Pharmacogenomic ordered to profiling sequentially. increased invasive caused in X% compared tumor and of -- and and estimate of period while first GeneSight sequentially, increased the the with

gross to of ahead of adjusted $XXX $XXX to million look reiterating of adjusted million expense our we $XXX and we $XXX to guidance $X.XX and operating of EPS financial margins million XX% to million XX% $XXX are -- As revenue XXXX $X.XX. of of

second organic in the long-term of from rest XXXX first XXXX, XXXX. financial volumes off compared of XX% prior grow collections base. the quarter of With while quarter, periods respect expect through cash guidance of not of anticipate second we revenue our quarter estimated reiterate first same the we do do growth receiving we the to In addition to quarter this to level to X%

also business. expect platform in of volume portal, have In seven of the due anticipate expectations unveiling investments the on seen ASP forward affordability. past virtual back our and of to of We solutions provider ASP experience the steady and address see initiation partnership patient revenue the growth and acceleration the the the we've the moving that we benefits to provider an Medical launch quarters across introduction on we transparency half price based our our care and to the Genome with to ordering of myGeneHistory unified made the new solutions of year,

As we are profitable strategic cash insights to it care. free continue positioned growth for to execute believe our delivering flow leader patient to in to transformation high-growth be now turn plan, generating and remarks. enhance back over closing Paul medicine, a precision I'll we key we

Paul Diaz

Thanks Bryan. and another progress We're this pleased with made quarter tough operating the environment. we've

to announce update deploy like our sustainable that Lastly, significant an We that XXth market to value pressure proposition a we some know the financially an are give sector on competitors be and will our Investor facing is August we to of struggling would on hosting growth progress. model. Day company's and

our of sustainable is scientific, foundation. that and technological, still built I'd a off underway, and solid While are platforms like financial our to emphasize transformation commercial

to to make liquid market platform technology, new several products investments scalable, We concrete marketing years. are continuing to over we steps MRD and like the are on selling this Precise our to and including bring excited in remote capabilities, take platform next

from Myriad peers this and trajectory the company its sets apart and puts that We growth, for creation. innovation, on value are a shareholder confident

path accelerating offerings the year better their future ever growth in the and are on initiatives deliver bright exploring launched introducing and insights. to health and Myriad to innovative as elevating our continue focus profitability We remainder the illuminate during ahead invest new products the work to for we our we shareholders. and serve newly our of future forward of products remains than with growth ways as sustainable full more Our Genetics, continue through genetic potential for new patients, to goal look to better customers the a to we commercial to

for to back it I'll Now turn Nathan? Q&A. Nathan

Nathan Smith

Paul. Thanks,

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

call. [Operator Now we begin Q&A our for Operator, now the of ready session. we Q&A are ready Instructions] to portion the are

Operator

Jack Thank of comes The first [Operator line with Research. Nephron Instructions] question the from you. Meehan

Your line open. is

Jack Meehan

the could happen wanted Thank once you will to to wondering a this you about you elaborate you test. the was applied that what and for good on I pricing GeneSight, that had talk afternoon. the do for Medicare that. saw PLA And think behind strategy summer. just finalized I code gets if

Paul Diaz

our believe bring market rev your saw note it's to strep payer cycle to as right that. on I strategy absolutely across We we're process. Jack, clarity the Yes, trying more do and our all

we brings with this stability, expansion GeneSight. build potentially to think clinical we not less to and the GeneSight So along continue that for more evidence coverage of

a we that expect of I solidifying great it's you've in so other gene the applied in compression we've to see And as identified for. done think pricing And there. step Medicare risk set we've that with codes terms don't pricing fact, or

we are what quite doing in here. So we're actually confident

Jack Meehan

And this entire new business follow-up will just get under of reimbursed it code. XXXX in moving will forward? So work GeneSight your as how book that, on starting a

you're confirmation how guess do you billing the code the work when under will Just just not goes today it effect? the how into does stack? contract PLA work payer, once with of I

Paul Diaz

That's a little granular for this call.

a answer. a answer and off-line not clear So I want to do in Jack. take why position I that stacking think you don't that to a any good try code involved, we're But we there's really happy that. but offline We're to to give anything? give to happy don't with you I'm take

Jack Meehan

I Okay. it. appreciate

too. to Day Paul. the Analyst forward Thanks, Looking

Paul Diaz

Jack. Thank, Great.

Operator

comes Our Cowen. Dan Brennan line with from the of question next

is open. line Your

Kyle Boucher

taking expected? to question. didn't worse out that for better Hi. notable sort anticipate how played of that February Thanks were walk areas in like four on the areas. across my Were back strength/weakness in there it I'd you quarter you than back Dan. gave Good or when through guidance afternoon. This of versus your is any for Kyle our the first product expectations

Paul Diaz

first think team were first of rallied. Well, look breath of made over portfolio kind behalf it. our other But and with we holding our into you there. and our the investments products expenses put inside new was will the surprise and more held digital platform coal really new the place say, the our rest the we're even the that during would benefit for operators. I look of of time tools it biggest GeneSight weeks our GeneSight the the that's strength six-week No returns because And was down commercial of process. we've managing six up in capital. on And I of probably on salespeople again and the up the high rest see in just great we think P&L, the growing where investing that operating new we invested with execution

proving year. customer So And rest the base blocking we really their lost as just for well and importantly, to -- think winning a gaining customers we quarter the that lot bodes the way. most and of team new of needs. our was along it back and the old some during responsive customers And that's that good a itself and tackling I we're

Kyle Boucher

anymore about are consensus revenue really then should still we segment? as one tumor just And but bit key strong be drivers profiling a now the for quarter profiling, tumor much that not there's sits it what down great. thinking but granularity That's be -- what as little volume so year-over-year on

Paul Diaz

platform focus of is we have the solutions want, test. single a -- what source of precise and XX% on work oncologists of plan an you as think you would want that did transformation easy-to-use oncologists the for information and I services I'd oncology the

the around patients are tumor we're being only really to as and provider they as our And And And is so that was we're profiling that rate getting, a tumor is they're tests, and rate. fact and responsive attachment ordering we're giving not And the is attachment them What well. of about we're lacking. our it's profiling ordering partners. report. test oncologists transformation really built whole the more excited myRisk very level high reconciling but appreciate myChoice one what the

just the And how win. customers. really it's that's so And think listening to we about I

Kyle Boucher

my taking questions. for Thanks Great.

Paul Diaz

you. Thank Sure.

Operator

question comes Goldman next line Matt with the Sachs. from Our Sykes of

Your line open. is

Paul Diaz

Matt. Hey

Unidentified Analyst

Hi. Ivy Matt. Good for afternoon. on This is

liquid you the from to to guidance you did said the assume biopsy? biopsy, but on expectations for X% your include oncology business, On I X% forward your growth approximately earnings provide revenue expected previous business color not any call through you mid-term could contribution rate XXXX going including that this liquid expansion

Paul Diaz

showed it is from demonstrated we next MRD. our pretty clear. block long-term growth specifically at to years. as for certainly the rate contribution year-over-year we include conference did growth And liquid Liquid sort to XX%. XXXX of guidance in have Look, that that XX% XX% we provided our achieve website, hope we MRD, and two I an and this that guidance over we can is is said We're said in X% not the what building slide of quarter that and and provided the at that can get that.

products to really based on all them getting this and is full portfolio the So in of the today their potential. rest the

Unidentified Analyst

you. Thank Great.

Paul Diaz

a follow-up? have Sure. you Do

Unidentified Analyst

No.

Paul Diaz

you. Thank great. Okay

Operator

And are pending questions at present further there time. no

Nathan Smith

lot. a Thanks

Paul Diaz

Well, everybody off Well, ahead get and our with I Okay. things Nathan script. wrap-up. Go

Nathan Smith

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

Operator

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

You may now disconnect.

Myriad Genetics (MYGN) 6 May 222022 Q1 Earnings call transcript