Okay, great. We can get started. I'm Puneet Souda. I cover Life Science Tools and Diagnostics here at Leerink, and it's my pleasure to be hosting the Myriad Genetics team here. Joining us, Sam Raha, CEO, CEO elect, joining us, and also Scott Leffler, CFO. Thanks for being here, guys.
Thanks for having us, Puneet.
Thank you for having us.
First of all, Sam, congrats on the promotion, and I think it's coming in under two months, right? Lots to cover in the session. I mean, just a number of topics, but maybe just to kick off, you have closed since you joined in 2023. One could argue almost two years in the role. You know the company, sort of internal workings. Maybe just now getting into this role, what excites you the most? Where do you see where's the most potential for, if you can call it, transformation or maybe opportunity base that can be expanded?
Yeah, no, thank you for the question, Puneet. First of all, it is an honor, privilege to have the opportunity to lead this company. It was very important to me when I made the choice to leave Agilent a couple of, not quite 15, 16 months ago, to really come to a place where we can do a lot to impact patient lives and help shape healthcare. I think that opportunity is ahead of us at Myriad. Specifically, to answer your question, as I think about the journey ahead, the most, I think, profound opportunity is to serve the fuller cancer care continuum. Clearly, we have a place to build on from our hereditary cancer leadership. As you likely know, last year we brought some select assets from Intermountain Precision Genomics, which now gives us a therapy selection assay, which is starting to do well.
We have the HRD leadership still there. MRD, I'm sure we'll get on to talking about that. It's an untapped opportunity for us, and we are incredibly late, but we still have an incredible opportunity there. If you think about even Prolaris, and that's in prostate cancer, we announced a couple of weeks ago a partnership with a company called PathomIQ to be able to complement our molecular test with an AI-based test for prostate cancer. More on that later. I'd love to talk about it, but all of this, this AI starts our opportunity to serve broader cancer, not just prostate cancer. What really excites me is the ability to serve this cancer care continuum more deeply, both organically and through partnerships, as well as to really leverage the foundational capabilities and scale that we've built.
It's the access to tens of thousands of healthcare providers combined with the investments we've made, continue to make digitally, be it EMR, be it other ways to serve our customers, and of course, the capabilities to process samples that we've built. I think when you put that together, it's going to be a real opportunity to serve and grow Myriad. One other thing I'll say, maybe it's an indirect part of the answer, is part of the journey forward for Myriad is about really thinking about where can we invest more, where maybe we're overinvested, because I think running a business is like life. You got to make choices. I think the Myriad story can be simpler.
Not just the story to the outside, the narrative, but that means even internally, because we have a lot of things, and not all of them give us the same opportunity for real return. Really thinking about that with Scott and the team over the next six months, nothing is sacred. We're going to look at it all and think about how we can drive the company forward.
Got it. Okay. Yeah, I want to get into more on maybe the portfolio transformation that started with Paul and continuing with you in some ways. You have had a fair share of challenges in terms of the GeneSight situation with United. I believe that's a $40 million headwind to commercial, $5 million to Medicaid. Maybe just help me understand, can you update us on your discussion with United, and where do you stand? What's the time for resolution there?
Yeah, let me start, and then Scott, please add in here. One thing, Puneet, it's very important, the way we're running the company on the inside that I would submit to you and others who follow us is we've taken the UnitedHealth GeneSight related thing, and put it in a box. So there's a defined amount of focus on it, but not so it doesn't become a distraction. Now, that being said, we are absolutely doing a number of things, including continuing to provide them with clinical data, new meta-analysis, so working with their medical affairs team. We are continuing to work with various advocacy groups to really bring the voice, so be it the customers, the patients, the others, because again, this was a policy decision around pharmacogenomics, not just about GeneSight.
Third, we are continuing to engage at various levels, including very senior level, to really understand what is, might there be something else that we could do that can help United take a different position on this? I don't know. I wouldn't give it any sort of, we don't know exactly if this is going to work out. We're not counting on it. It's not in our numbers. I think by the time it's time for them to make a decision on 2026 policy and what's going to be in, that's really about when this is going to come to a close. You want to add to that, including how much this is really our financials?
Sure. Thanks, Sam. I think, Puneet, you sized it right, and we've made public comments in the past about the headwind from United's decisions being about $40 million from the commercial side, $5 million from managed Medicaid. We did have about $10 million of out-of-period favorability in 2024 that was directly attributable to this line of business. We think of the total headwind in 2025 relative to 2024 as being about $55 million. Certainly, obviously, just like Sam was saying, we'll make every effort in order to mitigate that in our discussions with United, but there are opportunities for us to mitigate it in other parts of the business as well. That's certainly something that we're endeavoring to do.
Whether it is attacking other parts of the rev cycle and payer markets opportunity, either within GeneSight or across the rest of our portfolio, or just in general looking to offset the United-related headwind with other opportunities in the core portfolio, we believe that we have an opportunity to prove the strength of the overall portfolio by delivering a successful 2025. Yeah.
One of the interesting points was that you were still seeing volume growth there in GeneSight. Obviously, the reimbursement here was impacted. Maybe just walk us through some of the thinking around driving overall profitability, which is an important focus for you. What sort of expense reductions or other mitigation efforts are you thinking through as you look at this headwind and overall profitability in 2025? Yeah.
You can start.
Sure, I'll start, and then Sam can jump in and supplement my comments. We have already taken some cost-out action, both within the GeneSight organization and across other parts of the organization, which, quite frankly, I just view as being appropriate corporate leadership. Some of that is in direct response to the UnitedHealth development, but, quite frankly, some of it also is around the opportunity to make sure that our spend is being concentrated in the most appropriate areas. We have made public comments about the fact that we have accelerated investment in R&D, which includes MRD-related initiatives as well as others. I think that that really speaks to the ability of the management team to prioritize our efforts, even if it might be painful in some parts of the organization, in order to ensure that we're putting our best foot forward to create value.
Yeah.
Yeah, no, the only thing I'd add to that is that we made a deliberate choice coming into this year. Last year, we had $40 million of adjusted EBITDA. This year, our projection is between $25 million and $35 million. Could we have cut more to be neutral or even better? I think there's a yes, we could have, but it's also about continuing to invest on the drivers for the growth in 2026 and beyond. Another theme you're going to hear from me, Puneet, is what are the things that we can do to really accelerate growth? That's an important focus for me and the team going forward. Profitable growth, still important, but if there are choices to be made where we can, in a very deliberate way, do things and make choices internally and inorganic that allows us to accelerate the growth, that is something we're going to do. It is in that spirit where we chose to land our guidance at $25 million-$35 million for the EBITDA, adjusted EBITDA.
Just talking about the growth, I mean, that's an important point. Correct me if I'm wrong, but for 2026, the view is that you can deliver double-digit growth again. Just help us sort of provide a little bit more context as to how do you get to that, is that assuming sort of 10% growth in volumes, 2% in ASP, just maybe puts a take to that 2026?
One thing, just to clarify, when you say getting back to double-digit growth, I mean, obviously, the United headwind is real in 2025, but we have kind of laid out our view of how our 2025 guidance translates to about double-digit top-line growth after adjusting for the United headwind. In many ways, what you're talking about, that expectation in 2026 is really the same as what we're targeting in 2025, just adjusting for the United phenomenon.
Yeah, no, so then building on that, but acknowledging on a reported basis, our guidance is 0%-2.6% growth if you look at just pure numbers. Hey, as we go into 2026, we have a number of things that I think start giving us the opportunity for returning on a reported basis and more in double-digit growth. Just to get through the non-sexy parts of it, right? We still have some headwinds this year looking at the divestiture we made of the EndoPredict business in Europe. Small, but still millions of dollars of headwind. Going into next year, this is when we're going to, I think, start seeing more of the benefit, including Prequel will have been in the market for that much longer, the early gestational age. We're starting to see some pickup from that. We expect to continue seeing that.
FirstGene, we're launching next quarter, what we're calling our pre-launch phase. At some point next year, we would also be launching the commercial launch. We have our MyRisk expanded panel, our core panel, which hasn't been updated in a long time, by the end of this year, which we will bring to market, which will have now all the NCCN genes and opportunity to better serve and to get better reimbursement. Along with that, I don't think HRD is necessary, excuse me, MRD is necessarily going to be a really volume or revenue driver, but expect it to be launched by the end of the first half of next year.
The other things that we're doing systematically, like the EMR-related work, the real enablement, not just the number of additional sites that we're integrating, but really to start seeing the pull-through where the customers, the systems that we're setting up are ordering either more of the tests that they're ordering or ideally across the cancer continuum, for example. We got together more than 15 docs and other advisors from the oncology space, and a lot of them really reaffirmed that, listen, as long as you have some gold standard products in there, your Precise Oncology tumor is good enough for us. It doesn't have to be Foundation Medicine or Caris or whatever. All these things, I think, start to bear in 2026 to get us to true double-digit growth.
Got it. Yeah, no, that's helpful context. Maybe just on the point that you mentioned about EMR, I think you stated that unaffected, this is hereditary cancer, unaffected business slowed in 4Q with some impact from eight-week Prequel launch and the EMR workflow conversions that you had. Maybe just update us, is that all addressed at this point?
It's not all addressed, but let me just say, let me characterize what the issue was, what the challenge is, and what we're doing about it. That'll help. Fact is we integrated 4,500 new sites or offices and systems last year. Going live, putting our products into their EMR is one very important step. That's what the 4,500 ties to. What we also know is that beyond that, there is some real support for enabling success for these customers. We call it with our [NaviSeal,] these program teams, which really ensure, because there is a change in the workflow even for the staff, the office staff, to really help them do that, to answer their questions. A lot of them, by the way, are also moving from paper or portals to fully embracing Epic for the first time.
In some cases, these are bigger than just Myriad going into the system. This is an adoption of a new workflow. I say that because then it helps you understand that it's not as simple as, all right, we've done it, go. It will take some time. I think that in our estimation, by the time we start seeing the volume really start to appreciate, it'll be into the second half of this year, hopefully sooner. What we're doing is we have a dashboard. We look at the top 50 accounts, and we look at what is the pull-through this week versus that. What does it compare to before? What are the things we can influence? Because there's some nuances of differences, right? That's the approach we're taking.
Do you have any expectation of how much, whenever you integrate a test on the electronic EMR, does it drive a certain increase in volume? Is it 10%, 20%, 30%? I mean, some companies have pointed that out as an important driver. It just makes it easier to order.
Yeah, you know I would say, and I was looking at this data just on Friday with some of my colleagues, that it is hard to make a kind of a generalized statement. For example, where we've integrated Flatiron, that was a big effort that we had, I think, in the second half of last year, maybe even fourth quarter. We're already starting to see a good pickup there. Those are usually very focused oncology accounts that really use Flatiron. What we're finding with the reason it's hard to make a generalized statement is that women's health accounts have some different dynamics than oncology accounts compared to urology accounts where we have Lumea also integrated with our Prolaris product. If you'd give us just a little bit longer, but definitely it's intended to be material to help us with percentage points at least of growth. That's the intention over the medium to long term.
Got it.
By the way, there's a lot to go. Even at the end of last year, only about 25, less than 25%, I think Mark might have even said 20%, sorry, Mark Verratti, our Chief Commercial Officer on our call, have really been integrated of the total available customers. Now, granted, maybe 50% of those customers still like portals, like paper, but that means we still have a very large number opportunity, if you will, to integrate and drive volume over the next years.
Yeah, that's pretty meaningful. On the hereditary cancer market, I mean, this is something Paul was highlighting last year. Obviously, there was disruption in the market. There was a competitor that exited that market. There was another one that was acquired. Just all around, somewhat of a disruption, and it was seen as an opportunity and a share gain. Maybe just wondering, is that fully baked in at this point? Is there more opportunity to grab share there? I don't know if there's a way to quantify it. Yeah.
You want to start? Scott, you want me to start?
Maybe a couple of comments. Yes, that was a theme that came up periodically last year. I think that certainly we believe that there continues to be an opportunity for incremental share gains. I think the question is over what span of time it's going to play out. With disruption in the marketplace, particularly when you have one competitor being acquired by another, a lot of it is dependent upon the nature and pace of their integration and whatever policy changes they may be implementing, which really, at the end of the day, in the field, create the share shift opportunity. We continue to be optimistic that that opportunity is there or will be there, but it's difficult to circle a date on the calendar and say, here's exactly when provider X or provider Y is going to consider alternates because they are, for whatever reason, dissatisfied with the new regime.
Now, that being said, listen, with LabCorp and Invitae, it's only this year. Even though I think we've already benefited from that, it helped drive a hereditary affected volume up. The new policies have only gone into place coming into this year. Tempus, Natera, that's very early yet. By the way, maybe you're going to ask me to underline, but along with that crowded space, highly penetrated market, the bigger opportunity for us, we think, still remains in the unaffected side for familial cancer. That's a $3.5 billion market, less than 10% penetrated, growing at the high single-digit level. We are the leaders. We're programmatically driving things like our breast cancer risk assessment program, which really gives these healthcare systems and providers a way to drive their own volume and revenue as well.
I mean, for that market, do you need to bring about some changes in sort of how you're approaching that market or Salesforce in order to address and gain more share there?
Yeah, I think it's as much as anything there. Since we are the leaders, we are in front. It's about different ways to activate and stimulate the market. Because unlike in oncology, if someone has cancer and their provider recommends that you should have a MyRisk test, it's like, okay, it's part of my selection process for treatment. Whereas in the unaffected side, the things that we are doing in our program is to help drive awareness of hereditary cancer and the role it can have in one's health, even if they otherwise aren't affected yet. It's to give the tools to help these healthcare providers and customers to actually identify and message to these individuals. It's providing our genetic counselors. We found a quick consult really increases what is otherwise about 25%-30% of patients or unaffected individuals who their doc says, hey, you should consider that.
Once they actually speak to our quick consult in office for two minutes with our genetic counselor, that goes up to more than 80%. There are all these programmatic things. Just as a kind of a fun but relevant thing, we actually had Hannah Storm, who's a leading analyst on ESPN, who was affected herself, for example, around the Super Bowl, talk about MyRisk and use that platform to more broadly raise the awareness. Those are the sort of things that we have to do.
Got it. Okay. Just maybe switching gears, I want to get to MRD and some things on Prolaris too. Just on the women's health side, it's nearly half of the births are to the Medicaid mothers. I think Medicaid is on and off in the news, and there's questions about that. Just wondering, maybe walk us through how you're thinking about the risk here and the lens and how do you plan to mitigate the risk if there is risk that shows up?
There is certainly some amount of risk, but it's not one that we have deemed to be material for us. A significant amount of our revenue cycle efforts over the years have been specifically for Medicaid across the product portfolio, as well as in particular for women's health. We feel like those efforts, along with some of our other investments, will give us cushion from any kind of headwind from Medicaid cuts that might transpire.
Okay. Any thoughts on, again, ACOG is a question that remains in the space. Any updates that you have seen or anything that you have come across that gives you any more confidence on timing?
Now, the two-part message is, one, we're ready to catch the wave. We have a panel that's been expanded. It has all the contemplated genes that will be included in the update. The facts that I can point to that we should be aware of, one, perhaps part of the delay in issuing the new guidelines was related to a change in their own leadership that happened, if you remember, towards, I think, third quarter last year. I think they were also perhaps waiting for the new administration for the U.S. government. Now, Puneet, your guess is as good as mine. But we're ready for that. When that were to go in, if and when that goes into effect, combination of the updated guidelines from ACOG, as well as for 22q and microdeletions, we estimate that that's somewhere between annualized $10 million-$20 million of upside, which is not anywhere in our plans today.
Yeah. No, that's great. Switching gear to MRD briefly, Precise MRD launch you talked about first half 2026. There is some sensitivity benefit that was talked about, and I think for ctDNA and a parts per million detection limit below five and a couple of other metrics that have been provided on that assay. Realistically, as you said, you are coming late to the market. How do you position this assay and what indication do you think you can pursue that maybe gets you early traction in the market?
Yeah, no, great question. If I can just start with a handful of facts. I mean, first, some catalysts for you and others to track is our ability to, for the first time, really provide some clinical evidence, clinical study results at or around ASCO. Second, it's our filing or submitting to MolDX by the end of the year, and then within the end of the first half of next year to bring our first product to market. We are working on upwards of almost 20 different clinical studies now. They're both retrospective and prospective. They're across a number of different cancer types, all of which benefit from this ultra-high detection. For low-shedding cancers, which include breast, which include prostate, renal, and endometrial. What I will tell you then to answer your question more specifically, our thinking is that our opportunity is for these low-shedding cancers.
We picked breast to be first, also because in breast, we are an established leading player. We have the relationships. We have the other products that are being used. Our clinical studies right now in breast are looking at all the subtypes, HR positive negative, HER2 positive negative, triple negative breast cancer. Specifically, we are looking at both neoadjuvant, adjuvant, as well as remission. It will be the data from these clinical studies that will allow us to choose in the Q4 timeframe, hopefully sooner, what this first real indication will be in breast cancer that we'll bring to market.
Got it. On PathomIQ, I just want to touch on that point. It seems like it does two key things. One, it allows you to sell this. PathomIQ's AI-based assay for post-radical prostatectomy. Then the second is it opens up access to samples so Prolaris can get into Simon Level 1 evidence. I think the question is, you were not in the advanced table, advanced tools table. There are a number of questions around NCCN. How much does Simon Level 1 matter? How much does being in the advanced tools table matter? Maybe just circling all of that, what are some of the efforts that you're doing that can maybe get you all three of those? Maybe just rank order for us, what is most important for you in this market in terms of building that clinical evidence and getting those guidelines?
Yeah. I mean, I would maybe answer it a little bit differently, but hopefully this will satisfy the questions you asked. One reality that has started to happen is a perception, which our competitor did a really nice job of, how long is Myriad in this game anyway? How committed are they to prostate cancer? What we've already seen is by virtue of this announcement of the PathomIQ partnership, that has really helped dissipate that. Another thing that even in advance of getting, which I'll get to, Simon Level 1 evidence, we have started as soon as this happened, starting in December, excuse me, as soon as this, meaning the updated NCCN guidelines were published, working with KOLs to really talk urologist to urologist about the merits and advantages or not that Simon Level 1 really gives you. It's a statistical-based analysis and so forth.
We have a couple of new sales leaders who I think really bring what we need to really go hand to hand and use the data, use the KOLs, but really go aggressively. Right? That being said, like it or not, Simon Level 1 is real. And that has been an issue and a challenge for us. One of the things we are excited about is to be able to accelerate by 12-18 months our path to Simon Level 1 because our biggest long pole in the tent has been the ability to get the right kind of samples. We are seeing a lot of receptivity. That was one of the reasons in our diligence we chose PathomIQ because of our deep relationships with other urologists in these centers of excellence. We think that we have a path by early 2020, sorry, by, yeah, 2027 sometime to have Simon Level 1 evidence for both Prolaris plus our AI solution, but Prolaris itself as well, which otherwise would have been three, four years away.
Got it. Okay. Still, that's 2027.
That is by the time we actually get the Simon Level 1. There's just, yeah, there are so many steps, the studies, the analysis, the submission, and then for NCCN to consider that they only meet once or twice a year. Yeah.
Got it. Okay.
I think we're getting the benefit already because we have a path. We have clarity. We're going to have an AI solution by early 2026, sorry, yeah, within a year.
Got it. Just given the time, let me switch gears a little bit. I mean, obviously, a lot of transformation of the portfolio. There were divestitures over the years. How are you thinking about the overall portfolio? Is there an opportunity? Again, the markets are volatile, but is there an opportunity to potentially add to this portfolio or trim from this portfolio? Maybe coming back to an earlier question that you were going to look at it holistically. Just want to understand how are you thinking about the overall portfolio.
Let me start and then, Scott, I'll hand to you. Listen, like I said, we have to think about how we sustain and accelerate growth, profitable growth, but maybe make choices about the level of profitability if it allows us in a very deliberate way to do that. By the way, partnerships is a very important part of how I think we can also grow, right, into areas where we can complement. Maybe you can talk about the M&A part of it.
Sure. First of all, just as a reminder, we have a fairly minimal amount of debt on the balance sheet, and at least based on 2024 performance, they're not really that far away from being cash flow positive, at least on an adjusted basis. Certainly, we look to continue to build on that momentum here in 2025, even with the headwind from UnitedHealth. We feel like we're well positioned to be able to act when we find the most attractive strategic opportunities. Obviously, there are some that are going to be more capital allocation efficient.
When you can find a partnership like the PathomIQ opportunity that was so special for us, where you can really have an impact on your strategic positioning in a particular part of the market or the product portfolio, then it's absolutely wonderful to act on it with a modest investment of capital. Certainly, we continue to look at M&A opportunities as well. The attractive opportunities are just fewer and far between, especially if we're trying to avoid something that's significantly dilutive to our cash flows. We continue to evaluate those opportunities as well.
Okay. All right. We're at the time, but this was really an excellent conversation. Really appreciate your insights, Sam. Thanks for taking the time. Thanks for being here.
Pleasure, Puneet. Thank you.