Myriad Genetics Inc Wells Fargo 21st Annual Healthcare Conference

Yeah. First of all, Evan, thank you very much for having us. Pleasure to be here. Of course.

Let me start with this. The two primary drivers, both that led to our Q2 performance as well as the guidance change, are a continued softness in our prenatal testing volume and average revenue per test there, as well as pressure on reimbursement for hereditary cancer testing. As we shared on our prior earnings call, we have activated and are actively working on a number of initiatives that address these challenges as well as I think will set up Myriad to be in a much stronger place. Let me just highlight some of these, and these are the things that really are some of the key takeaways for investors.

One, though we do it rigorously on a regular basis, we are taking a strategic view of our portfolio, both products as well as business segments, to really determine which parts of our product portfolio in the business we believe really fit in this next phase of Myriad going forward. What I can tell you is we feel like we're making good progress with this, and we hope to be able to share within the next couple of months actions that will significantly strengthen the financial position of Myriad going forward. We've also talked about an initiative called Project Ascend. It's an internal name. This is really about modernizing how we operate the company. It's about organizational as well as process optimization, all with the intention of how can we better serve customers, increase our win rate, while becoming more productive, more efficient, and scaling for the future.

We expect to share more on this also coming up probably on our next earnings call. Now, one of the bigger challenges that I mentioned that we faced in Q2 is our average revenue per test for hereditary cancer testing. So we have a number of initiatives here to address that. First one's related all the way from contracting to billing and collections, focused on the revenue cycle management. I think you'll probably have some more questions. Ben can get into that a little deeper later. We're also taking a mid to long-term view to be proactive with all our major payers and the things we can do from a policy approach there as well. Now, all that being said, the key takeaway for investors is that we understand the challenges. We're all over it. We're making good progress.

As well, the guidance that we've provided we think is adequately conservative. For example, we have not factored in any improvement in our average revenue per test in the second half. We haven't factored in any contribution from the additional salespeople that we've added, any of the new products, any of those things. Also, traditionally, if you look historically, I should say, over the last several years, more than 51, almost 52% of our revenue is in the second half of the year versus the first half. But what we've done in setting our guidance is really you can multiply the first half by two, and that's close to the midpoint of what we've said. So we believe we're adequately positioned there on the guide and all these other things and the progress we're already making and seeing, I'll say gives us pep in our step.

Ben? Absolutely. From a timing standpoint, really if I were to opine on why Q2 is the time that we encountered additional revenue cycle management friction, I would be speaking on behalf of organizations that drove that friction, so it would just be a guess.

What I will say is, as Sam mentioned, we identified the challenge, and we have deployed two initiatives that we have made very good progress over the last couple of months on. The first initiative we call the revenue cycle management optimization initiative. I think about that initiative as driving exceptional tactical execution as it relates to the RCM process, making sure that we are evaluating the people, the processes, the tools in order to remove friction from the process where we are billing payers and ultimately collecting and driving better yield on those collections. Again, we went to work very quickly.

This is an initiative where we have done a lot of work, and there is lots more work to do, but we are really pleased with the progress that we have seen. The second initiative is related to MyRisk reimbursement, and I view this more of a strategic initiative that will have medium and longer-term implications as we partner with payers, LBMs, other constituencies that will help us drive alignment between the way doctors are practicing medicine using technology and services or tools provided by laboratories like us that is ahead of where medical guidelines recommend use in some cases, and then also where medical policies from a payer standpoint are aligned. We have an opportunity to drive alignment across technology, medical policy, and medical guidelines, and this initiative is really focused on that.

Yeah. There is a number of things that we can do to drive different outcomes. When you look at the revenue cycle management landscape, particularly for our industry, changes in payer behavior are something that happen all the time, and that is something that will continue to occur. What that means is we need to be positioned to identify those changes and pivot quickly so that we can eliminate that friction as quickly as possible and make sure that we collect on those tests that we are performing. There are absolutely things that we can do and we are actively working on. When I talk about evaluating people, process, tools, capabilities with that revenue cycle management optimization initiative, it is focused on addressing friction today, but it is building capabilities so that we can pivot to changes in the future as well.

Yeah. Sure. To clarify, the specific pressures from a handful of payers that were the primary drivers of what we saw in Q2, they are not about medical policy. Medical policy is intact. However, we are talking about medical policy because with an eye to the future, core to what we are doing, both our mission and our financial future, is ensuring we stay within medical policy and how we can expand access into new medical policies or coverage for additional individuals. That takes time. It takes a lot of effort and a lot of engagement.