Myriad(MYGN) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Myriad Genetics reported total revenue of $181.2 million for Q1 2023, reflecting a 10% year-over-year growth, marking the second consecutive quarter of double-digit revenue growth [28][30] - Total volumes grew organically by 21% year-over-year, with significant contributions from hereditary cancer testing and GeneSight [27][28] - Adjusted operating expenses for Q1 were$ 144.5 million, higher than previously anticipated due to performance-based commissions and sales and marketing costs [30] Business Line Data and Key Metrics Changes - The oncology business generated $77.6 million in revenue, with Prolaris volumes growing 22% year-over-year [12][13] - Women's health hereditary cancer testing volumes increased by 32% year-over-year, marking three consecutive quarters of positive growth [14][15] - GeneSight volumes grew by 31% year-over-year, with approximately 4,000 new clinicians ordering the test for the first time [16][17] Market Data and Key Metrics Changes - Prenatal testing volumes, excluding contributions from SneakPeek, grew by 12% year-over-year [27] - The company noted a strong performance in existing accounts, indicating that growth was primarily driven by wallet share rather than new customer acquisition [11][12] Company Strategy and Development Direction - Myriad Genetics is focused on maximizing the potential of its current products, including MyRisk, GeneSight, and Prolaris, while also investing in operational improvements and customer experience [20][21] - The company announced strategic partnerships, including an expanded collaboration with Illumina and a new partnership with SimonMed Imaging, aimed at enhancing access to genetic testing [6][25][26] - The Labs of the Future strategy is being implemented to improve operational efficiency and reduce costs [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability and positive operating cash flow by Q4 2023, despite challenges in the operating environment [31][33] - The management team emphasized the importance of maintaining stable pricing and effective capital deployment to support growth and shareholder value [33][34] Other Important Information - The company ended the quarter with$ 109 million in cash and no debt, indicating a strong balance sheet [32] - Myriad Genetics is actively working on enhancing its digital capabilities to improve customer engagement and streamline operations [18][19] Q&A Session Summary Question: Timeline for product pipeline updates - Management confirmed that there are no material changes to the product launch timelines, with FirstGene expected to launch in Q4 [40] Question: Clarification on operating expenses increase - Management explained that the increase in operating expenses was due to higher sales and marketing costs associated with increased volume, but they expect to control costs moving forward [41][42] Question: Productivity increase from EPIC EMR integration - Management indicated that they expect a 25% lift in volumes from EMR integrations, which will reduce friction with payers and improve operational efficiency [48][49] Question: Impact of COVID on growth comparisons - Management clarified that while there were easier comparisons due to COVID, the current growth is driven by strong performance across all product lines [52][53] Question: GeneSight ASP and billing issues - Management acknowledged a sequential decline in GeneSight ASP due to seasonality and billing issues, but emphasized overall revenue growth [57][58] Question: MRD assay market outlook - Management expressed excitement about the MRD assay and its differentiation in the market, with expectations for revenue generation in the back half of the year [64] Question: M&A strategy - Management confirmed that they are open to opportunistic acquisitions but are currently focused on maximizing profitability from existing products [66] Question: Cross-selling opportunities - Management highlighted early successes in cross-selling products across different channels, with ongoing efforts to enhance provider engagement [68][69]