Myriad(US:MYGN)2023-11-07 00:35Financial Data and Key Metrics Changes - The company reported a 14% year-over-year revenue growth in Q3 2023, marking four consecutive quarters of double-digit revenue growth [21][26] - Adjusted gross margin improved to approximately 70.4%, compared to 68% in Q3 of the previous year [23][26] - The adjusted operating loss was reduced significantly to $2.2 million from an operating loss of $20.6 million in Q3 of last year [10][26] Business Line Data and Key Metrics Changes - Hereditary cancer testing volumes grew 18% year-over-year in Q3, driven by competitive account wins and increased adoption of myRisk [9][19] - Women's Health business saw a 22% increase in hereditary cancer testing volumes and a 20% growth in prenatal testing volumes, marking five consecutive quarters of positive volume growth [14][19] - GeneSight volumes increased by 19% year-over-year, with approximately 4,000 new clinicians added to the franchise [16][19] Market Data and Key Metrics Changes - The company gained market share across all product lines, with significant volume growth in hereditary cancer and prenatal testing [9][19] - The prenatal testing business, excluding contributions from SneakPeek, grew 20% in Q3, reflecting ongoing commercial execution [9][19] - Prolaris, the prostate cancer test, saw a revenue increase of 18% year-over-year, supported by a new positive medical policy from UnitedHealthcare [13][19] Company Strategy and Development Direction - The company is focused on a multiyear transformation journey with four key objectives: team reenergization, modernization of lab and IT capabilities, restoration of organic growth and profitability, and strengthening R&D and product management [5][6] - The company aims to improve patient and provider experiences, as evidenced by strong Net Promoter Scores and increased provider retention [6][7] - New partnerships, such as with QIAGEN and Onsite Women's Health, are expected to enhance service offerings and market reach [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted profitability and positive adjusted operating cash flow in Q4 2023 [24][26] - The company raised its full-year revenue guidance, reflecting strong business momentum and confidence in long-term growth targets [26][29] - Management highlighted the importance of continuous quality improvement and customer satisfaction as key drivers for long-term growth [28][29] Other Important Information - The company resolved several legacy litigation matters, providing more legal and financial visibility moving forward [8][10] - A new Chief Operating Officer, Sam Raha, will join the company to focus on improving the patient-provider journey and overall customer experience [11] Q&A Session Summary Question: Progress on addressing zero pays and impact on margins - Management reported significant progress with $6.2 million in net out-of-period cash collections and improved gross margins, expressing optimism about future ASP improvements [31] Question: Market penetration within myRisk - Management clarified that the 15% market penetration refers to the unaffected market, with ongoing efforts to drive growth in both affected and unaffected populations [32] Question: Commentary on gross margin and expectations for Q4 - Management noted productivity improvements and cost management as key factors for expected gross margin growth, with confidence in achieving over 70% margins next year [35][36] Question: Guidance for 2024 - Management expressed confidence in the 2024 revenue guidance of $815 million to $835 million, citing strong year-to-date performance and market adoption [42][43] Question: Updates on GeneSight publications and pipeline - Management indicated that additional publications supporting GeneSight's utility are expected next year, with ongoing clinical validation efforts [46][49] Question: Clarification on cash bridge and litigation payments - Management confirmed that the $5 million payment to Ravgen is included in the cash flow expectations for the fourth quarter [51][52] Question: LDT regulation and GeneSight - Management expressed confidence in navigating regulatory changes, noting that many quality assurance processes are already in place [55] Question: $40 million ASP opportunity and its impact on 2024 guidance - Management highlighted ongoing progress in ASP improvements and cash collections, contributing to margin expansion expectations for 2024 [58][59]