Myriad Strong Growth, Guidance

 

• Revenue Growth: Achieved 12% year-over-year in Q1.

• Adjusted EBITDA: Reported positive in Q1.

• Adjusted EPS: Near breakeven in Q1.

• Hereditary Cancer Testing Revenue: Grew 16% year-over-year.

• Prenatal Revenue: Increased 22% year-over-year.

• GeneSight Revenue: Increased 21% year-over-year.

• Adjusted Gross Margin: Improved by 80 basis points year-over-year to 58.5% in Q1.

• Adjusted Operating Expenses: Decreased by 4% year-over-year.

• Net Promoter Score: Increased to 74 in Q1 from 70 in full year 2023.

• Full Year 2024 Revenue Guidance: Projected between $820 million and $840 million.

• Full Year 2024 Adjusted EPS Guidance: Between breakeven and $0.05.

Q: Congrats on the quarter. Maybe Paul or maybe Mark, just talk a little bit about the runway that you see for future market share gains in both hereditary cancer and Prenatal. You made some comments that it's sort of just at the beginning, so would love to know kind of where you see that runway and how long? And then how sticky are the new relationships that you're building? I'd assume if you get those relationships, it's probably easier to keep them over time, post winning them. I just want to get some color around that. A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: Yes, Matt. Well, look, first, it's the early phase of this, particularly for large accounts, these institutions take a while to make changes. I would say what's happened, and Mark will elaborate here, is that we're in the room now, certainly with 2 or 3 other competitors and people are revisiting their choices. And as I said earlier, we're really focused on the things that they tell us they care about, ease of use, clinically-differentiated products. And that's where EMR and the other point-of-care things really matter. But you're absolutely right that these relationships I think will be stickier. I mean you know I come from a large hospital system world. And once these institutions make changes without the disruptions that we're seeing now, it's very hard to kind of get in. Now that being said, genomic testing is not #1, 2, 3 or 10 on the list of a hospital system's priorities, but we're pretty excited. I think that expectations should be, though, that the business we hope to sign in the back half of the year certainly could give us a lot of momentum going into '25. But you really won't see the what I think is a big opportunity to fully come through until '25. But Mark, why don't you take it.

Q: Great. And then maybe just as my follow-up, a related question. Perhaps, again for you, Mark, just given the change in incentives for the commercial team to revenue from volume, does that help salespeople target the right customers? I'm sure in this market dislocation, there's a number of customers that might not be economically viable. And this change in incentive, does it focus your salespeople on attracting the right customers? And what has the reception been from your commercial team to this change in incentive? A: Mark S. Verratti - Myriad Genetics, Inc. - Chief Commercial Officer: Yes, Matt, you are spot on, right? I think when we make those changes, it -- it just allows our team to focus their attention. It isn't that we're excluding any particular patient or any particular provider. But from a point of focus and even to Scott's comments, just all of our efforts around revenue cycle management, making sure that the order, making sure that the provider knows what the guidelines, making sure the provider has an understanding that what the specific payer coverage is and making sure that at time of ordering, we're collecting as much information as we can, absolutely allows us to be able to pull through increased ASP. And that's something that I think in this space, Matt, just really was not -- teams just really didn't have that type of focus. So I would definitely agree with you there. And I would say the acceptance from the sales force has been 100% aligned. That's -- obviously, that's how they get paid. That's how they get compensated, but it's also about the way that they spend their time in the field, right, where they're not wasting time focusing in areas that aren't going to benefit the company and they're certainly not going to benefit them.

Q: I want to start with a high-level one. Scott and Sam, it's now been a few months since you joined the company. I'm curious where you are in the process of essentially evaluating the firm, evaluating your teams. Essentially, what's better, what's worse? It just would be interesting to get an update on kind of your early learnings and kind of what -- where you think you are in essentially starting to play offense in your leadership roles at the new firm? A: Scott J. Leffler - Myriad Genetics, Inc. - CFO: Sure. I'll start off and then hand it over to Sam. First of all, thanks very much for the question. I could not be more thrilled to be at Myriad, but also with everything that I've seen and learned, both about the company itself and the momentum that it has, but also in terms of the overall broader market opportunity that we see in front of us. I just feel privileged to have joined the company at what is a very special inflection point where so much great work and so much great investment has already been done. And I think you can see a lot of the fruits of that effort in our results from Q1 but also to now see the landscape in front of us in terms of the ability to accelerate growth throughout 2024 and going forward. So if there is any learning that I've had in the last 3 months at the company, is how extraordinary the progress that has been made but the momentum also that we have going forward (inaudible) forward. Sam?

Q: Congrats on a strong quarter. Maybe first one, obviously, you had a really solid start to the year. You maintained the full year guide. You talked about, I think, just prudence. But could you speak to -- it didn't sound like there were -- I think you called out $3 million maybe in prior period benefits, so most of the beat was all organic. So is there anything that would prevent you from seeing this strength continue? Just wondering why not kind of raise the guide now? A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: We agree, Dan. We're just putting one foot in front of the other here. It's a really strong start to the year, particularly on the ASP side, that we see run through the year. And we certainly can build on that, hopefully exceed guidance as we go through the rest of the year, but just didn't see clear to get ahead of ourselves at this point.

Q: On reproductive health, a couple of larger players have exited the market. And you clearly have made progress in capturing share, but how are you gaining share without compromising on going forward when the business model of (inaudible) the market? A: Paul J. Diaz - Myriad Genetics, Inc. - CEO, President & Director: I'm not really sure if I followed, you didn't come through particularly clearly. I think the question was how are we gaining share profitably. I'm sorry, could you just restate the question, please?

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

https://finance.yahoo.com/news/myriad-genetics-inc-mygn-q1-074746479.html