Myriad Genetics (NASDAQ:MYGN), a leading player in genetic testing and precision medicine, has reported a robust first quarter with a 12% revenue increase year-over-year, driven by gains in both their prenatal and GeneSight businesses.
The company is close to breakeven on an adjusted EPS basis and has achieved positive adjusted EBITDA. With the integration of new acquisitions and a focus on expanding access to genetic testing, Myriad Genetics is optimistic about maintaining its full-year guidance for 2024.
Key Takeaways
- Myriad Genetics experienced a 12% revenue growth in Q1, with a strong performance in prenatal and GeneSight segments.
- The company reported positive adjusted EBITDA and is nearing breakeven on an adjusted EPS basis.
- Myriad Genetics is investing in clinical validation studies, EMR integrations, and plans to increase its presence at ASCO and ACOG conferences.
- The FDA's final rule on Lab Developed Tests is seen as a competitive advantage for the company.
- Full-year 2024 revenue guidance is maintained between $820 million and $840 million.
- CEO Paul Diaz emphasized the company's focus on precision medicine tools, particularly for cancer care.
Company Outlook
- Myriad Genetics reiterates its full-year 2024 financial guidance, with expected revenue growth of 9% to 11%.
- The company plans to focus on productivity gains and reinvest in R&D, clinical studies, and IT.
- Myriad Genetics is optimistic about the impact of the anticipated ACOG guidelines expansion on market share and ASPs.
Bearish Highlights
- The unpredictability of the biopharma business, as indicated by the impact of a significant partnership win in the previous year's Q1, presents challenges.
Bullish Highlights
- Myriad Genetics has seen a 22% increase in prenatal revenue and a 21% increase in GeneSight revenue.
- The company expects to start processing samples with the newly integrated Precise Tumor and Precise Liquid tests in Q3.
- Myriad Genetics is making strides in increasing coverage and traction with large chain sites and state entities.
Misses
- The company has not provided specific guidance for Q2 but indicates that analyst estimates are aligned with expectations.
Q&A Highlights
- CEO Paul Diaz discussed the company's positive turnaround in ASPs and the ongoing integration process post-acquisition of Intermountain.
- Myriad Genetics is working on improving coverage and prior authorization requirements to gain better traction with gene sites.
- Diaz mentioned the potential for growth in the biopharma business despite its inherent unpredictability.
In conclusion, Myriad Genetics has started the year on a strong note, with significant growth in key business segments and strategic initiatives that are expected to drive future success.
The company's focus on expanding access to genetic testing and precision medicine, along with its favorable view of the new FDA regulations on Lab Developed Tests, positions it well in the competitive landscape. Myriad Genetics remains committed to its full-year guidance, reflecting confidence in its ongoing strategies and market opportunities.
InvestingPro Insights
Myriad Genetics (MYGN) has demonstrated resilience in the face of industry challenges, as evidenced by its robust revenue growth and strategic initiatives aimed at expanding access to genetic testing. The company's financial health and market performance, as reflected in real-time data from InvestingPro, provide additional context for investors considering MYGN's potential.
InvestingPro Data metrics show a market capitalization of $1.79 billion, indicating the company's size and market presence. Despite not being profitable in the last twelve months, with a P/E ratio (adjusted) of -10.62, analysts predict a turnaround, forecasting profitability for the current year.
This optimism is bolstered by a revenue increase of 11.03% in the last twelve months as of Q4 2023, showcasing the company's ability to grow its top-line figures. Moreover, the revenue growth rate for Q4 2023 alone was 10.57%, further underlining the company's robust performance in a challenging quarter.
InvestingPro Tips highlight several key points for investors:
- Analysts have revised their earnings estimates downwards for the upcoming period, suggesting that investors should monitor future earnings releases closely.
- The stock's volatility could present opportunities for investors with a higher risk tolerance or a focus on short-term trading strategies.
For those looking to delve deeper into MYGN's financials and future prospects, InvestingPro offers additional insights. There are 5 more InvestingPro Tips available, providing a comprehensive analysis of the company's financial health and market position. Interested readers can explore these tips at https://www.investing.com/pro/MYGN and can take advantage of an additional 10% off a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24.
Overall, Myriad Genetics' efforts to navigate the complexities of the biopharma industry while investing in growth areas such as prenatal and GeneSight testing have positioned it as a company to watch in the precision medicine space. With its full-year 2024 revenue guidance maintained and strategic initiatives underway, MYGN stands as an intriguing prospect for investors seeking exposure to the genetic testing and precision medicine sector.
Full transcript - Myriad Genetics (MYGN) Q1 2024:
Operator: Thank you for standing by, and welcome to Myriad Genetics First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Matt Scalo. Please go ahead.
Matthew Scalo: Thanks, Latif, and good afternoon and welcome to the Myriad Genetics first quarter 2024 earnings call. During the call, we will review the financial results we released today and afterwards we will host a question-and-answer session. Our quarterly earnings release was issued this afternoon on Form 8-K and can be found on our website at investor.myriad.com. I’m Matt Scalo, Senior Vice President of Investor Relations, and on the call with me today are Paul Diaz, President and Chief Executive Officer; Scott Leffler, our Chief Financial Officer; Sam Raha, our Chief Operating Officer; and Mark Verratti, our Chief Commercial Officer. This call can be heard live via webcast at investor.myriad.com, and a recording will be archived in the Investors section of our website along with this slide presentation. Please note that some of the information presented today contains projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management’s current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time at the Securities and Exchange Commission, specifically the company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual result to different materially from those contained in our projections or forward-looking statements. I will now turn the call over to Paul.
Paul Diaz: Thanks, Matt. Good afternoon, everyone, and thank you for joining us. On today’s call, we will discuss highlights for our strong first quarter performance, provide an update of the progress that the team has made accelerating profitable revenue growth. First, I want to thank my Myriad teammates and our provider partners for their continued support and commitment to advancing our mission and vision to make genetic testing and precision medicine more accessible and helping people take more control of their health. We’ll now turn to Slide 4 to talk about our highlights for the quarter. We continue to deliver on our commitment to shareholders as we achieved double-digit revenue growth in the first quarter compared to last year. Talking both volume growth and ASP improvements across the portfolio. Our focus on profitable growth continues into 2024 as we reported positive adjusted EBITDA when we’re close to breakeven on an adjusted EPS basis in the first quarter. We’re excited about the ongoing execution of our near-term strategic priorities that are driving growth and efficiency across the enterprise. We are seeing early wins in both Oncology and Women’s Health related to recent market dislocations as we continue to reinforce our oncology offerings with Precise Tumor and Precise Liquid, currently being integrated into our new labs. This morning we announced a reorganization of our international operation that I will provide more detail on as well as progress standing up our new Labs of the Future. We continue to accelerate investments, clinical validation studies and EMR integrations. A large part of our transformation journey has been addressing our clinical validation data deficit. In 2024, we’ll see Myriad go to ASCO and ACOG with more publications, abstracts, and posters that we’ve seen in a long time. Mark and Sam will speak towards these and other strategic priorities on the call as well as important updates on upcoming product launches they will review. Next slide, please. Our strategic areas of focus are directly aligned with our customer expectations and the pillars we believe will drive long-term growth, innovation, and profitability for shareholders. Every provider survey we do and every customer interaction I have always point back to five things that providers, patients, and customers. Our customers want tests that have strong clinical utility and validity, as well as a lab partner with the most comprehensive testing measures that meets their needs. Our customers care about fast turnaround time and tests that do not place unnecessary burdens on their staff. We also want tests that are affordable for their patients. Our four strategic pillars address these customer needs, which I will discuss on the next slide. Top-tier science and innovation are at the foundation of Myriad Genetics. We deliver products that are clinically validated and use in the real-world clinical settings. We’ve invested heavily in technology and in lab operations, automated, scalable, and cost-effective labs that are compliant with FDA quality management system requirements. Our team is the key to make it easier to do business with periods of testing new best forms through results delivery, supported by our ongoing investment in EMR integrations, our new universal order management activities, and our patient provider portals. Finding these pillars with expertise across regulatory, compliance, and revenue cycle management, we find ourselves in a position to serve our customers at scale to profit. Next slide, please. Today, we announce reorganization of our European operations, better aligned company resources for our domestic opportunity, while continuing to serve key biopharma partners and patients outside of the United States. As part of the reorganization, Myriad signed definitive agreement to sell our EndoPredict business to Eurobio Scientific. We will license the right to continue to produce and sell EndoPredict as an LDT in the United States as part of Precise Oncology Solutions. We will also license Eurobio the right to sell Prolaris in vitro diagnostic kits outside of the U.S. Strategic rationale for this group is part of our continued effort to accelerate profitable growth, while supporting our biopharma partners more efficiently. This also allows us to better position Myriad to grow our other global businesses more efficiently through strategic partnerships, including licensing and distribution. We would also call out that this does not affect your pain, which has been and remains an important market for Myriad Genetics. This transaction is expected to close in the second or third quarter of this year. Last quarter we announced the acquisition of Precise Tumor and Liquid from Intermountain Precision Genomics. Sam will provide an update on the integration of the associated labs to our Utah, Salt Lake facility, which is making steady progress. Together, these transactions represent very capital-efficient ways to optimize and enhance oncology portfolios. These transactions are expected to be accretive for earnings and cash flows in 2025. I will close with comments on the FDA’s final rule regarding regulation of Lab Developed Tests. While we share many of the concerns raised by the industry regarding the use of the medical device framework for this industry oversight. We do view the final rule as generally positive for Myriad, as all of our clinical tests, CAP/CLIA, and New York State requirements. We have a strong quality assurance with Regulatory Affairs team, as well as a long history of compliance to FDA quality tests. We plan to be proactive in working with FDA to ensure that our products continue to meet the use of the regulatory requirements. Sam will cover this in more detail later on the call. Now, I will turn it over to Mark.
Mark Verratti: Thanks, Paul. I will begin on Slide 9 to talk about our commercial teams. We continue to invest in tools and analytics that enable our commercial teams to better segment their territories and identify clinicians that could benefit from Myriad’s testing portfolio. We have seen positive results from the use of these analytic tools as our commercial teams continue to drive through and sustainable revenue growth. In the second half of 2023, we realigned our commercial salesforce incentives from volume-based targets to revenue-based targets. Overall, the shift better aligns our commercial teams’ goals with the company’s focus on reducing no-pays. We believe that the 12% revenue growth and positive ASP trends in the first quarter in part reflect our investment in these analytical tools and the realignment of our commercial team incentives and our ongoing focus on revenue cycle management, which Scott will talk about in more detail. Most importantly, these efforts position as well for continued positive momentum throughout 2024. Next slide. Myriad continues to lead with differentiated insights offered by our MyRisk, RiskScore, hereditary cancer test. In the first quarter, hereditary cancer testing revenue grew 16% compared to last year with volumes up 9% year-over-year. We believe this consistent growth reflects a combination of our reputation as a leader in this area, the commercial team doing a better job driving home or differentiating messaging, improving relationships with genetic counselors, along with early competitive dislocation. Looking forward, we are excited about the omni-channel opportunity to drive MyRisk growth across all of our businesses. And we continue to accelerate our investment in clinical validation studies and EMR integration to address recent market dislocation with the most recent, with the most clinically differentiated hereditary cancer test on the market. Next slide. As mentioned, no part of our portfolio has more upside potential than our hereditary cancer testing. Just for the unaffected population, there are an estimated 50 million women in the United States that meet guidelines for hereditary cancer testing. We’re making good use of the analytical tools as mentioned previously, to better identify and serve those patients. Additionally, through partnerships with LifePoint hospitals and some of that, we are expanding our reach even further. In the first quarter of this year, our Women’s Health team grew hereditary cancer testing revenue by 12%, compared to last year, while our oncology team grew hereditary cancer testing revenue by 20% over the same period. Our ability to serve more patients in both the unaffected and affected markets reflect these consistent results, and there are so much more upside for us to realize. Next slide. Here at Myriad, we focus on ways to expand access to genetic testing. MyRisk with RiskScore is one of the best examples of how we are changing staff. RiskScore is the component of MyRisk that expands its benefits for people of all ancestries and is the only polygenic RiskScore in breast cancer validated for women of any demographic. Not only is this a major differentiator for MyRisk, but RiskScore is an example of our commitment to expanding access to genetic testing and increasing equity for care for all people. Next slide. MyRisk has been in the news a lot recently as more people become aware of the importance of genetic testing in the preventative care market. In today’s patient-centric healthcare ecosystem, many patients want to drive their own healthcare journey, which is why we have invested in resources like Mygenehistory for patients to determine their breast cancer risk online for free, and why we continue to provide free genetic counseling to anyone who takes MyRisk test. Myriad is not just a lab partner. We are also a Women’s Health advocate whose objective is to provide insights that help people take control of their health and increase access to genetic testing. I will now turn to Slide 14 and talk about our prenatal business. In the first quarter, our prenatal revenue increased 22%, and volumes increased 9% compared to last year, reflecting market share gains and ongoing initiatives to improve ASPs. Our commitment to support providers negatively affected by the market dislocation continues to drive volume for this business, while our disciplined approach in adding quality accounts to the franchise has resulted in strong ASPs for both Prequel and Foresight. We see even more upside for this business as we await ACOG guideline expansion this year. We believe the expanded guidelines will improve patient health and expand the market opportunity for carrier screening as clinicians are already ordering larger panels from us. Once ACOG moves, we believe the rest of the market and payers will adapt as well, which will likely result in ASP improvement, considering the large number of expanded panels that we currently run that are often not reimbursed. We look forward to ACOG guideline updates and the launch of Foresight Universal Plus later this year. Next slide. In the first quarter, GeneSight revenue increased 21% year-over-year, as we reported approximately 124,000 tests in Q1. ASPs improved both year-over-year and quarter-over-quarter, in the first quarter, reflecting improved revenue cycle management activities. I want to end on Slide 16 and share what is in the pipeline for our products. I would remind investors of our upcoming launch of Foresight Universal Plus expanded carrier screening test in the context of anticipated ACOG expanded guidelines. This new test will feature an expanded panel as well as more efficient and cost-effective workflows. These guideline expansions would also support our multiple prenatal screening tests, FirstGene, which we hope to launch later this year. We continue to adapt to our oncology offering with the addition of Precise Tumor and Precise Liquid from our recent acquisition. Sam will speak towards the progress we are making integrating both these tests into our new labs. We are making tremendous strides in the development of Precise MRD. Last quarter, we announced the research collaboration with the National Cancer Center Hospital East in Japan to use our highly sensitive Precise MRD test. We look forward to speaking more on MRD at ASCO this year, as well as Myriad’s other areas of research included in the seven abstracts accepted by ASCO across HRD, polygenic risk scores, germline registry studies, and our tumor-informed approach to whole-genome sequencing. Now, I will turn the call over to our Chief Operating Officer, Sam Raha.
Sam Raha: Thanks, Mark. Let me start on Slide 18 and provide an update of our Labs of the Future program. A quick reminder that the overall objective of this program is to strive innovation and operational excellence to continue delivering high-quality testing results at scale that meet regulatory requirements, while shortening turnaround time in support of our ongoing focus, improved patient and provider experience, all of which continue to differentiate us from other labs. As you may recall, we completed construction of our new lab facilities in South San Francisco and Salt Lake City in 2023. Highlights from Q1 of this year include completing and passing clinical inspections by New York State in Salt Lake City, by the state of California and CLIA in South San Francisco. We also completed the validation of Prequel, our NIPS assay, in South San Francisco and completed the first phase of bringing up Precise MRD assay workflow in Salt Lake City. Our plan for South San Francisco remains to complete the move-in workflow validation and full-scale prenatal lab operations by the end of 2024. For our new Salt Lake City lab, we remain focused on completing the move-in process as well as the validation of sample processing for most of our oncology assays by the end of 2024 and running those assays at the scale by the end of Q3 in 2025. We are also in the process of integrating the recently acquired Precise Tumor, Precise Liquid test into our new Salt Lake City facility. Let me talk more about that now on this next slide. You may recall that we completed the acquisition of select assets from Intermountain Precision Genomics last quarter, including lab instrumentation, workflows, and Precise Tumor and Precise Liquid assays, which together these two are genomic profiling tests with therapy selection that are part of our overall precise oncology solutions portfolio. Our immediate focus has been on retaining employees associated with the acquisition as well as testing continuity for providers as we move these operations to our new Salt Lake City facility. I’m happy to share that we have seen great engagement from our new team members and that turnaround time has already been reduced under our direct oversight. We’ve advanced our lab transition planning and started moving some instrumentation to Salt Lake City within the quarter. We expect to start processing Precise Tumor samples in Salt Lake City in Q3 of this year as we also advance our work on Precise Liquid. And by the end of 2024, we expect to have completed the lab move entirely and to fully be operational for sample processing reporting in Salt Lake City. Next slide, please. Building on what Paul shared. Last week, the FDA released its final rule regarding the oversight of Lab Developed Tests or LDTs. Adding to Paul’s comments earlier, our current view that this finalized version of the rule is more favorable than the preliminary guidance. We believe that Myriad is in a good position to work within the new framework. First of all, the rule provides a continued path for LDTs approved by New York State Department of Health to serve the market without requiring immediate additional analytical or clinical validation through the FDA. And, again, all of our on-market tests meet CAP/CLIA, New York State requirements. Second, we have a strong quality assurance regulatory affairs organization, over a decade of meaningful experience collaborating with the FDA on regulatory submissions, including two FDA-approved tests: MyChoice CDx and the BRACAnalysis CDx. We’ve also built and maintained a robust body management system, which is the foundational element for all the patient samples that we process and report on. While we are optimistic about the FDA’s new rule, we are also aware that the FDA intends to review labeling associated with LDTs and could review the sufficiency of analytical and clinical validation data for LDTs that are approved by New York State. Finally, I have personal experience running a business that is regulated by the FDA. And since joining Myriad, I’ve been working closely with our teams to prepare and plan for increased FDA oversight and how we can use the LDT rule as a competitive differentiator for Myriad. Turning to the next slide, I’d like to end with an update on select operational highlights from the first quarter. We are proud to have a high level of organizational engagement across the company. We reflect it in a single-digit employee turnover level. In terms of market penetration, health care providers among our most important constituents. And their satisfaction with Myriad Genetics led to NPS or Net Promoter Score of 74 in the first quarter, up from 70 for the full year of 2023. A figure that has continued to improve over the past few years, and this is a testament to the focus and investments we continue to make in the patient provider experience. In terms of efficiency and productivity, this quarter we increased commercial productivity by 11.5%, compared to the last quarter, as a result of the continued execution of our commercial transformation that Mark and his team are leading, including improved sales planning and process optimization. With that, let me turn it over to Scott Leffler, our CFO. Scott?
Scott Leffler: Thanks, Sam. I’ll start on Slide 23. We delivered a strong overall performance in Q1, led by 12% revenue growth year-over-year. This growth was primarily driven by Hereditary Cancer testing, Prenatal testing, and Pharmacogenomics, and speaks to internal initiatives such as an improving customer experience and continued execution by our commercials. Mark provided commentary as to have commercial teams with enhanced analytical tools are addressing healthcare provider needs and more effectively generating revenue growth. We believe these activities, in addition to ongoing progress in revenue cycle management, are important drivers of our Q1 ASP improvement of 2% over the year-ago period. Historically, ASPs in the first quarter tend to be soft due to resetting up deductibles and other adjustments that are spending up each year. So the fact that we are starting off 2024 with such a strong ASP performance bodes well for the rest of the year. Next slide. On the Slide 24, we revisit some of the revenue cycle initiatives that our September 2023 investor events. We have made progress on multiple fronts, including ramping up EMR integrations, improving prior auth [ph] outcomes, automating our billing process, and expanding payer coverage. Myriad has seen a number of payers recently expand coverage of average risk populations that could benefit more tests. First quarter revenue reflects approximately $3 billion from a single payer, who expanded coverage of these average risk patients as well as other immaterial favorability from out-of-period adjustments. We are pleased with this continued progress against our long-term goal to reduce our no-pay rate, complementing the volume-generating potential of the business. Moving to Slide 25, I want to highlight our financial performance by quarter. First quarter adjusted gross margin of 68.5%, improved 80 basis points compared to last year, overcoming headwinds associated with the IPC lab, and Precise Tumor and Liquid assays, which were acquired in February of this year and are still being integrated. First quarter 2024 adjusted OpEx to $139 million, increased sequentially from the fourth quarter of 2023, but decreased by 4% year-over-year. As reflected in our full year 2024 guidance, we expect our full year OpEx run rate to be higher than the Q1 amount as we ramp up spending to accommodate growth and strategic development. Our strong revenue growth and margins in Q1 drove significant improvement in overall profitability, including an adjusted EPS loss of about $0.1 versus a loss of $0.21 in the first quarter of 2023, as well as $4 million of positive adjusted EBITDA compared to a loss of $19 million in the prior year period. Regarding financial flexibility on Slide 26. We finished Q1 in a solid position with approximately $104 million in cash, cash equivalent, and marketable investment securities, and have $41 million of availability under our credit facility. The first quarter is typically a high cash burn due to seasonal factors. However, we saw a meaningful year-over-year improvement in adjusted operating cash flow with an outflow of only approximately $9 million in the first quarter of 2024 versus an outflow of $25 million in the first quarter of 2023. Importantly, adjusted operating cash flow is expected to be positive the remainder of 2024. On Slide 27, we reiterate our full year 2024 financial guidance with a revenue between $820 million and $840 million, representing annual growth between 9% and 11%. Our strong Q1 performance positions us well to meet or exceed our revenue guidance range, but I would also note that there are areas where we will increase that to accelerate actionable commercial opportunities in a changing competitive landscape to further drive the top-line, as Mark mentioned. An example of that accelerated spend would be our EMR integration efforts, where new customer wins are often dependent upon our ability to meet the IT requirements of prospective customers. Overall, we are optimistic regarding the business trends and the company’s ability to grow at or above industry growth rates. We remain comfortable with full year growth margin range of 69.5% to 70.5%, but adjusted operating expense growth between 5% and 7%, and adjusted EPS between breakeven and $0.05. Now, let me turn the call back to Paul.
Paul Diaz: Thanks, Scott. We continue to build on the pillars of long-term growth profitability. It has delivered our strong results in 2023 and the first quarter of this year. Our clinically differentiated products supported by technology, deliver value in real-world clinical settings, and enable early detection and better treatment decisions for providers and their patients. Our modernized lab, commercial engines are example, where investments in automation and advanced technology are yielding improved workflows, faster turnaround times, and reduced operating costs. All of this reinforcing our position as a trusted differentiated lab with specialized expertise, best-in-class quality, the strong scalable commercialized underpinned by data, research, and technology with industry leading margins and business management. We continue to energize the enterprise around our shared vision to make genetic testing and precision medicine more acceptable, helping people take more control of their health, and so they will provide us to better treat and prevent disease. I’d like to now turn it back over to Matt for take your questions.
Matthew Scalo: Thanks, Paul. As a reminder, during today’s call we used certain non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP financial results, a reconciliation of the GAAP to non-GAAP financial guidance can be found in our earnings release and under the Investor Relations section of our website. Now, we’re ready to begin our Q&A session to ensure broad participation, we’re asking participants please ask only one question and one follow-up. Latif, we are now ready for the Q&A portion of the call.
Operator: Thank you. [Operator Instructions] And our first question comes from the line of Matt Sykes of Goldman Sachs.
Matthew Sykes: Hi. Good afternoon. Thanks for taking my questions. 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 we’d 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. Thanks.
Paul Diaz: Yeah, Matt. First, it’s an 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 two or three other competitors, and people are revisiting their choices. And as I said earlier, we really focus 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, I come from a large hospital system world that 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, the genomic testing is not number one, two, three, or 10 on the list of hospital system 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 can give us a lot of momentum going into 2025. But you really won’t see, well, I think it’s a big opportunity to fully come through until 2025. But Mark, why don’t you take the question?
Mark Verratti: Yeah, I would agree with that, and thanks for the question, Matt. I think not to speak over Paul here. I think the benefit is we are at the table. Myriad is perceived as best-in-class. And so, I think we are at the table. These providers, even though there is dislocation, they’ve got lots of other priorities, and so we think of it as it’s going to take a couple of quarters for us to really accelerate. But as Paul mentioned, and as I mentioned during my comments, for the Myriad’s business with EMR integration and all the investments we are making that really suits us well for the back half of the year and going into 2025.
Matthew Sykes: 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 is 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?
Mark Verratti: Yeah, Matt, you are spot on, right? I think when we make those changes, it just allows our team to focus their attention. It isn’t that we are excluding any particular patient or any particular provider. But from a point of focus and even the 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, making sure that at time of ordering, we are collecting as much information as we can, absolutely allows us to be able to pull through increase ASP. And that’s something that I think in this space, Matt, just really was not – teams just really did have that 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. 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.
Scott Leffler: And what we’re perfectly, I mean, I’ve talked to sales teams about this, they understand now that maybe a point of volume is worth giving up to get 3 or 4 points of revenue. So we are just much better aligned now and, I think, you started seeing that inflection and that change in the border, because they are very much now aligned with the revenue cycle management initiative. And I guess, Mark said at our different international sales meetings, so we have not got pushback because we really help them, embrace this as far as change. And so, I think, you’ll see that net benefit play out over the course of the year and accelerate into 2025.
Matthew Sykes: Thank you.
Operator: Thank you. Our next question comes from the line of Doug Schenkel of Wolfe Research. Please go ahead, Doug.
Doug Schenkel: Hey guys, thank you. Good afternoon. Thank you for taking my questions. 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 off in your leadership roles at the new firm?
Scott Leffler: Sure. I’ll start out and then hand it over to Sam. First of all, thanks very much for the question. It could not be more real to be an area, but also with everything that I’ve seen and learned both about the company itself and the momentum that it has also in terms of the overall broader market opportunity that we see in front of us. I just feel privileged to join the company and what is a very special inflection point where so much great work and so much great investments have already been done. And, yeah, 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 for 2024 going forward. And so, if there is any learning that I’ve had in the last 3 months of the company, it is how extraordinary the product that this has been made [Technical Difficulty] Sam?
Sam Raha: Yeah, thanks, Scott. Thanks for the question, Doug. I concur with what you said, Scott. I’ll tell you that I have a vantage point of coming from some other larger companies that you’re aware of, and I would put our team on par with any of them. It is a focus on, as Paul was mentioning, understanding patient first, the science, but the operational execution to deliver timely results, quality results. I think all of those things are exactly what is needed for this next phase of our journey. I also, it’s taken time, it’s not as obvious, it wasn’t to be coming from the outside, just the level of transformation on so many different fronts that this company has really executed on the last 2 years. And, I think, there’s a lot of return yet to be seen from that. And of course, now Scott and I, joining this great organization. We have an opportunity to help be part of taking us to the next level. So not only do I have no regrets. This is exactly what I wanted to see. I’m thrilled to be here.
Paul Diaz: And Doug, I’d only add that Dr. George Daneker has just been incredible addition, an oncologist physician who led a large health systems oncology business, I mean he has had such an impact just over the last couple months. And Dr. Dallas Reed on our Women’s Health Side. So, the company build, the team build is happening on many different levels and these two guys have just been great. They’re freeing me up to do lots and lots of other things and you saw a little bit of that this quarter with some of the strategic stuff. So I couldn’t be more pleased with our new partners here.
Doug Schenkel: That’s fantastic. Thank you for all that detail. And maybe I’ll just try to sneak in one more on an unrelated front. Regarding the LDT final rule, I appreciate what you shared in your prepared remarks for whatever it’s worth, my take was, yeah, this actually kind of turned out to potentially be a pretty big advantage for Myriad. I’m just wondering if you guys by and large agree and as we look forward recognizing this is going to take a few years to phase in. Does this change anything as you think about how you develop assays? How you go to market? How you think about things competitively? Again, I think, this increases barriers to entry for others and this may even boost your position as a consolidator. So I’d love to get any comments on where you agree or disagree with my initial thoughts on this. Thank you.
Paul Diaz: Yeah, I’ll start, Doug, and Sam can add. I agree, I mean I think that this is very difficult for some scale operators. We have been preparing for this, though, for years, quite frankly. When we began to develop our plans to last the future, it was not just a real estate play. It was an automation strategy. It was to have a quality management system with full knowledge that this was coming. We feel lucky, and the investments we’ve made over the last decade in those quality management systems now can be leveraged, both in our existing products, modifications to our existing products, and future products. So, clearly, we think this is going to be a competitive advantage, and the capital markets taken together with this, I think, is going to put a lot of pressure on folks, whether their health systems, up-and-coming lab operators, or others. Sam’s doing a great job of pulling the team together. And you can talk a little bit about every single one of our products is going through product management with respect to these roles that we’ve been working at for a while.
Sam Raha: Yeah, I mean, I concur with everything Paul said. That really answers your question, Doug. But just to fill down what Paul was saying, we have been preparing for very diligently going through every single product we have both on-market and that we’re preparing to launch some of the things that Mark talked about with an eye to all those critical elements, right, not only quality management systems. But, what are the studies that need to be done? What is the labeling approach? And all doing that while we meet most important thing, and you heard Paul and myself talk about it over and over again, right? We have to make sure the quality standards are there, but the tests are relevant. Quality is there, and the turnaround time is there, and we need the test accessible. So I think this is going to be…
Scott Leffler: Yeah, I don’t know how folks that are outsourcing their lab operations get to 70% gross margins and do it consistently and meet these new requirements all at the same time. So I think it will be quite a challenge.
Operator: Thank you. Stand by for our next question, which comes from the line of Dan Brennan of TD Cowen. Your question, please, Dan?
Daniel Brennan: Great. Thank you very much for the question here. Congrats on a strong quarter, guys. Maybe first one, obviously you had a really solid start to the year you maintained a 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.
Paul Diaz: You’re right. We agree, Dan. And 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, see guidance as we go through the rest of the year, but just didn’t seem prudent to get ahead of ourselves at this point.
Daniel Brennan: Got it. Thanks, Paul. And maybe on the Hereditary Cancer side, the Oncology side, really beat our forecast. Women’s Health was strong, but more in line. Just could you elaborate a bit more on kind of how much the benefit was from the share gains that you’re seeing from the dislocation versus some of the ongoing initiatives that you have? And, presumably there’s still a lot more share gains ahead, given the size of that business that went back. So just a little more color on kind of what you saw this quarter teasing it out and kind of what’s assumed in the guidance going forward?
Mark Verratti: Yeah, Dan, this is Mark. And I think we called it out that in Q1, most of it was just our ongoing blocking and tackling. I think we’re always winning share back and forth, so we would expect, as we mentioned earlier, that any incremental gains would happen in the back half of the year.
Daniel Brennan: Got it. Okay, great, guys. I’ll get back in the queue.
Paul Diaz: Thank you.
Operator: Thank you. Our next question comes from the line of Puneet Souda of Leerink Partners. Please go ahead, Puneet.
Puneet Souda: Yeah. Hi, guys. Thanks for taking my questions. I just want to clarify, the European EndoPredict business, if there was anything for that in the guide, and just wondering, I know you have reiterated the guide, but just wanted to clarify that point, and then I have a follow-up.
Paul Diaz: Yeah. No, I would say that both of the strategic transactions, we sort of are incorporating within the guide, and so being able to reposition the portfolio with the addition of Precise Tumor and Precise Liquid, reorganize our European operations, and become much more efficient in the way we were serving that market pretty expensively, and to put a little more cash back on the balance sheet. These are both very capital efficient transactions, and whether it’s on the revenue on the profitability side, within our guidance for 2024, and accretive for earnings and cash flow of 2025. So we are really excited in this market that we are picking and choosing our opportunities. And we think there will be more in terms of bolt-ons and strategic acquisitions going forward. But there’s a kind of stuff that we want to keep doing same-string furloughs or different philosophies around those kind of things.
Puneet Souda: Got it. Okay. And then just following up on that, I mean, when you look at the portfolio optimizations or that you have done, the focus on Precise Liquid and expansion into therapy management and also MRD, sort of Paul, just walk us through how you think about further either trimming of the portfolio or as you said, potential expansion, other strategic options that you might pursue given sort of where the state of the market is right now in diagnostics?
Paul Diaz: Yeah. When I pushed George and physicians, and we’re certainly going to ASCO with these questions, so what are the key precision medicine tools you need to treat a cancer patient, breast cancer patients, et cetera. Hereditary cancer always comes up first; somatic, second; liquid, third; and MRD, interesting new novel technology for it. So we’re just very excited over the next couple of years. We’re going to have a place where you can get those primary key tools to treat and monitor the progression of patients in one place, in an EMR, with consolidated reports. And I think that is going to be a big differentiator from others, who are trying to string together this and all of a sudden the Hereditary Cancer seems to be interesting. When I got here everybody thought it’s a dead bounce kind of thing. So we kind of like the portfolio position. That being said, we are investing in innovation, we’re investing in building more studies as we refer to on the call, that’s a place where we have it playing catch up, going to ASCO and ACOG with more studies and more readouts than we had in years, and we’ll certainly be watching the marketplace for great science and innovation that fits within our portfolio, but we’re going to stay pretty disciplined on the indications that we’re focusing on and the channels where we think we have launched.
Puneet Souda: Got it. Super helpful, guys. Thank you.
Paul Diaz: Thank you.
Operator: Thank you. Our next question comes from the line of Andrew Cooper of Raymond James.
Paul Diaz: Hey, Andrew.
Andrew Cooper: Hey, everyone. Thanks for the question. Maybe just first, kind of sticking with the O-U.S. transaction, maybe just give us a little bit more of the thinking on sort of circling the wagon here on the U.S. opportunity and what our takeaways from that should be. Is it, “Hey, we’re just really excited about the opportunity here and don’t need to worry about the European efforts in the same way we have before?” Like, what should our takeaway really be on that decision?
Paul Diaz: Yeah, I would say that the thesis is generally that complexity is the killer of growth and accountability. And operating in Europe is both complicated and expensive. Every single country has its own requirements. We were going to be forced to set up satellite labs everywhere to go through their regulatory IVDR process. And the juice just wasn’t worth the squeeze, whether you’re bio folks, that’s where they live, that’s where they do business. They’re great at kits. And so for us to continue to serve through distribution arrangements and our LDT operations at Salt Lake, to continue to expand in Japan, where we have a growing and very profitable business. And yes, resources we have to be very efficient. So investing in studies, investing in EMR, has higher returns on bringing in this new business, new opportunity we see in terms of consolidating the market, where Europe is a much longer-term and a more complicated process. So that was really what went into the strategic positioning.
Andrew Cooper: Okay. That’s helpful. And then maybe just shifting to the P&L a little bit, would love a little bit of flavor, I know you shared a little bit, but on some of the ASP dynamic, maybe across some of the different areas of the portfolio. And then also, just if we think about the ramp in OpEx through the year, can you give us a breakout of how much of that we should think about as true kind of new product growth that you’re trying to drive and new efforts versus sort of maintaining the growing base that you have?
Paul Diaz: I’ll take the second one. I’ll let Scott take the first one. We’re continuing to try to get productivity gains across all OpEx, whether it’s commercial; B, and we play in the support center and trying to repatriate dollars to R&D, the clinical studies, and to IT, where we know we have very quick returns on investments. So we expect to stay within that 5% to 7% growth. I just remind everybody over the last couple of years, we’ve done exactly what we said we were going to do. And we’ve done that again this quarter, and you’re really starting to see the leverage of this operating model this quarter. And so we maintain that we can manage within that 5% to 7%. Within that, we may push the 7% growth in OpEx, but a higher percentage of that, call it, 10% to 15% growth in the R&D and tech spend, while the other areas, it really wages and benefit costs that are in the 4% to 5% range, all of them. So that’s how I would think about that. No, big investments beyond that 5% to 7% range in our OpEx. You’ll see some ramp up over the course of the year, and just a great job by the team starting this year in terms of actually beating budget in the first quarter. So you will see a little bit of ramp each quarter as we invest in getting ahead of the launches and the studies that we’re working on.
Scott Leffler: Yeah, so I’ll take that here. What was your first question on ASP? And I’ll just remind you that on the latter, I mean, Paul, we did talk a little bit about the fact that looking back on 2023, our overall ASP performance for 2023, I think it was a little bit worse than we would typically expect. And so coming into the year, we already saw that there was an opportunity to really perform even better than we would typically hope for, just given the ability to recover some of what we thought last year, along with incremental organic improvement from the various initiatives that we’ve talked about. But really, I would say that it’s just been an extraordinary success so far this year. And more or less across the board is the individual product level that you see outside of ASP gains. And when you look at the blended performance, where I think we call that a 2% contribution from ASPs, in some ways that high is how significant the ASP improvement has been at the individual product level, because you have a little bit of product mixed that is impacting that blended number. But really, what we’re seeing almost across the board is much greater than that 2% improvement in ASP. And that’s something that we believe certainly is sustainable and based on the number of initiatives, we continue to have that play something that we can build on.
Andrew Cooper: Great. I appreciate the time. I’ll hop back in the queue.
Paul Diaz: Thanks, Andrew.
Operator: Thank you. Our next question comes from the line of Rachel Vatnsdal of JPMorgan.
Paul Diaz: Hi, Rachel.
Rachel Vatnsdal: Hi. Good afternoon. Hi, guys. Thanks so much for taking the questions. So first, I just wanted to dig into seasonality and 2Q expectations. Last quarter, you provided guidance for 1Q on top and bottom. So I was wondering if you could do something along those lines for 2Q as well. So first up, how comfortable are you with the Street at around $200 million of revenues and roughly a $0.01 of loss per share? And then given some of the moving pieces that you highlighted today, ranging from LDT to some of the product launches and competitive dynamics. How are you thinking about the various segments performing in 2Q?
Paul Diaz: So that was a lot in fact. So first, we did not give Q1 guidance, and we’re not giving Q2 guidance. I think, directionally, the Street’s a pretty good place in terms of where estimates are for Q2, obviously, building on our Q1 success. There’s nothing that we’re seeing in the estimates for Q2 that trouble us. I would encourage folks not to get ahead of us here. Again, just there’s a lot of moving parts with Labs of the Future and everything else going on. But on individual products, it continues to be a story of continuing to grow. Q2 is typically a strong reporter for us in terms of volume. And as Scott just said, the ASP tailwinds that we have to continue in the year, so that does go well for a strong year, even without big market share gains, as Mark said, probably happen later next year, later this year, and quite frankly create really strong momentum going into this one spot.
Rachel Vatnsdal: Great. And then just on my follow-up around ACOG, you mentioned that ACOG guideline expansion would be upside later this year if we were to see it. So, I guess, what’s your latest assumption on when we could see an update from ACOG? Appreciate it, it’s not embedded into guidance at this point. And then I just wanted to talk for a minute about market share regarding 22q. One of your peers out there has more of an opt-out strategy when it comes to 22q testing. I know you guys have focused more on the profitability side and have more of that opt-in type of strategy. So when ACOG eventually expands their guidelines, should we see that positive guideline inclusion, how do you see that playing out from a market share perspective given that shift between opt-in and opt-out? Thank you.
Paul Diaz: Yeah. We just released a study on 22q, which was showed the power of people, quite frankly, and differentiated from everything else on the market, quite frankly. And so, if 22q is included in ACOG guidelines, we think that will give us just another reason to continue to win share, and win share that’s profitable. I just want to keep underscoring for everybody is profitable growth here. That’s what we’re focused on, and that’s what we deliver at this border, and that’s what we’re going to continue to deliver. But you’re absolutely right. The expansion of ACOG guidelines should they happen, we think both will broaden adoption as well as improve ASP, and the launch of Foresight Universal Plus will include those genes that we expect. So we’re holding off until we see that, and that kind of just goes to the product management discipline overall. We want to make sure that we are not launching products that are not in guidelines, and then we don’t – and then we have a path to payment, which is the thing that I think the industry is finally grappled with this, launch is not just having your studies and going out and selling docs on your product, it is also having an eye for getting paid and running it through your lab physician. So that’s the balance we’re trying to bring to product management. But the expansion of guidelines is a great tailwind for us going into next year if they are adopted as we hope later this summer, and we’re all kind of on the stand by there. And 22q would be also just great to have in that context.
Operator: Thank you. Our next question comes from the line of Sabu Nambi of Guggenheim Securities.
Subbu Nambi: Hey, guys. Thank you for taking my question. On reproductive health, a couple of larger players have exited the market, and you clearly have made progress in capturing care, but how are you gaining share without compromising on moving forward in the business model of certain states and markets?
Paul Diaz: 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 restate the question, please? My apologies.
Subbu Nambi: Yes. Can you guys hear me now?
Paul Diaz: It’s a little better. Yeah, maybe just a little louder. Thank you.
Subbu Nambi: Okay. So on reproductive health, a couple of larger players have exited the market, and you are clearly making progress in capturing share, but how are you gaining share without compromising margins? Given the business model of those that exited the market didn’t really focus on the margins.
Paul Diaz: Yeah. So good question. We absolutely are trying to be there for customers. As Mark said, we see patients. We don’t see a payer. But that doesn’t mean that we are not focused on making sure that we are bringing on business with good margins that we can do it effectively. So, I think, what you’ve seen over the last 2 years is our ability to grow and grow more profitability, and you saw it the last 2 quarters. So it is about profitable growth, maintaining those growth margins near 70%. That will fluctuate sometimes from quarter to quarter, depending on mix and other factors. But we’ve stayed in that 68% to 70%, and I think we can probably do a little bit better as the year progresses here. But absolutely committed to not just bringing on business to win business, but to bring on business that is profitable and that generates cash flow. If you look at our cash flow conversion and you look at our 50 days in DSOs, then we’ve got to convert billings into cash. And ultimately, I think that’s what discipline businesses need to do and we’re trying to do here.
Subbu Nambi: Super helpful. And one last one for me. On MRD, any updates on clinical data? How is the enrollment progressing? And are you still planning commercial launch the back half of next year?
Paul Diaz: Yeah, so there’ll be some additional studies at ASCO. And then we are expecting to get a readout on an MD Anderson study this fall, late summer. And in addition, we will be running samples for pharma in July, I am told. So I think Q3, Q4, we will have a lot more to talk about the progress we’re making with the study, but everything is progressing there. We have another patent. We’re expecting to get issues here shortly. So, well, we wish we were making more progress. We are going to be investing in some additional studies. But so far, my understanding from Dale is that they’re running through the labs really well, sensitivity is high, our partners are really pleased with what they are seeing in terms of the results, and we’ll be talking, as Mark said more about this at ASCO, including with our partners at MD Anderson.
Subbu Nambi: Perfect. Thank you, guys.
Paul Diaz: Thank you.
Operator: Thank you. Our next question comes from the line of Mason Carrico of Stephens Inc.
Jacob Krahenbuhl: Hey, this is Jacob on for Mason. Congrats on a strong start to the year. Lots have already been covered, so maybe just keep it to one here, but could you talk a bit about the early traction you’re seeing within your oncology portfolio after acquiring Intermountain? I realized launching Precise Liquid and your MRD offering will be a big driver of this opportunity, but have you may be seen an increase in the number of docs ordering multiple tests within this segment yet?
Paul Diaz: Yeah, I mean, I think that it’s still early this day here. I mean, the first thing was to make sure that we integrated it. Sam and the team are doing a great job there. And we’ve seen a slight increase, but the real push will happen later this year once it’s fully integrated and going into 2025. It’s not really envisioned to be a driver of our guide for this year. But we do see Precise Tumor numbers overall growing and not just in terms of the Intermountain for sure. And now we control 100% of P&L, so it’s not just sort of the allocated part of P&L. So that is starting to contribute. But I think what you’ll see coming out of ASCO is a big push in terms of our oncology team about preparing a Hereditary Cancer with Precise Tumor and that really sets the stage for Liquid next year and MRD. So, stay tuned. I think we’ll have a lot to say at ASCO about how this portfolio comes together in terms of precision medicine tools for oncologists, particularly for breast cancer patients but for other indications as well. And that’s what we’ll be highlighting at ASCO. We’re pretty excited about the feedback we’ve gotten from oncologists in terms of that is reviewed our preparation.
Operator: Thank you. Our next question comes from the line of Michael Ryskin of BofA.
Paul Diaz: Hi, Mike.
John Kim: Good afternoon. This is John on for Mike. Hey, afternoon. I wanted to ask on gene sites, it’s great volume ASP and did better than our models so exceptionally well. Could you provide any update you’ve had in terms of improving the coverage? Like what states and blue plans are next for you? And, what’s in your guide versus what can be an upside?
Paul Diaz: It is – as Scott said, it’s just blocking and tackling right now. We haven’t even really fully levered biomarker pieces yet. We’re probably don’t want to call it individual states, but we are amping up a couple of states in the attorney general’s office and other places. But it’s been a number of different wins, $1 billion bucks here, $1 billion bucks there. All of a sudden you’re talking about a nice list in ASP. And just gaining more traction on coverage with large in terms of chain site and also improving prior off requirements. And we’re working with CMS, a Medicare Advantage plant with respect to prior off requirements, along with other industry participants. And again, as Scott said, it’s been across the board effort, across all our products in terms of seeking out places where we didn’t have coverage, even for MyRisk Hereditary Cancer, where we had certain blue plans that were not covering. And as Scott said, last year was a really tough year from ASP’s perspective. And we’re seeing the result of that turnaround now, working through some of those coding changes and other things. We think, again, that momentum will continue. We’ll build on that throughout the year and going into as well.
John Kim: Got you. Understood. And then on the flip side, if I could ask for the tumor profiling, any thoughts on how the volume and the ASP is going to go there?
Paul Diaz: Yeah, the tumor profiling was an impact, because we had a really big win in Q1 last year with a couple of biopharma partners. So it was really in the biopharma revenue that skews that performance. My choice has been a little down, because it changed the average risk. But overall, that negative 17% was driven by the fact that we had a big win in Q1 of last year with two or three big biopharma partners. The biopharma business is very lumpy. So, we’re not really clear. We always get paid until it’s always really good business. But sometimes it falls in Q1, and sometimes it falls in Q3. And so we still are excited about the prospects of building that business, and that’s something Sam and Daneker [ph] are really partnering up on.
John Kim: Understood. All right. Thank you.
Paul Diaz: Thank you.
Operator: Thank you. I would now like to turn the conference back to Paul Diaz for closing remarks. Sir?
Paul Diaz: Thanks, everyone. I think everyone’s heard enough from me today. So, I appreciate you guys spending time in the call today. I just want to thank my teammates for all their hard work. It was actually a difficult operating quarter. We had a few issues in the lab that we had to work through, the team rally, and again, we’re just really pleased at the start of the year. I appreciate all of you participating in the call today in your support. And, again, I hope you are starting to see, as Scott said, just the beginning of the process here of us really starting to grow Myriad Genetics, and I think you can expect and should expect more from us as your request. So, thank you all.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
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