All right, good afternoon. I'm Doug Shankle from Wolfe Research. It's my pleasure this afternoon to host Myriad Genetics from the company. We have old friend Sam Raha, Chief Executive Officer, and Ben Wheeler, Chief Financial Officer, who I just had the pleasure of meeting in person for the first time. Welcome to you both, and thank you for being here.
Thanks for having us, Doug.
Good to be with you.
For those less familiar with Myriad, Myriad is a precision medicine company focused on hereditary cancer testing, women's health testing, mental health, and there is a really exciting and emerging pipeline in therapy selection and MRD. I thought what we would do over the next half hour is maybe just level set with a state of the company, then get into some of the financials, really the framework and the growth algorithm from here. Sam, you and I were just talking about it. It'd be good to also talk about some of the core oncology products, but obviously some of the exciting new initiatives, including an MRD. I want to make sure we have time to not miss the opportunity to talk about prenatal and also what's going on with GeneSight. A lot to cover. Why don't we get into it?
Sounds great.
Maybe starting with a high level, a lot has changed at Myriad Genetics since we sat here together a year ago. How would you describe the Myriad Genetics of today versus a year ago? How much has changed since you stepped into the CEO role and maybe building off of that? Where do you think we are in terms of what ending as we kind of think about the transformation that you're spearheading?
Yeah. Yeah, thank you for the question, Doug. A lot has changed. I would characterize where we are now as positive momentum, momentum from the clarity that we now have with our updated strategy. We've defined the opportunity to grow in a predictable, accelerated way and a profitable way. By doing that, we're going to do, excuse me, we're going to do that by really focusing in on the cancer care continuum. You touched on it. We'll talk more about that. That means we're going to be more than hereditary cancer testing, and we have some specific things we've already done related to that. Number two, we've talked about growing now at or above market for prenatal and mental health. That really speaks to the discipline, right? I say that when you're a parent, you love all your children equally, or at least you say you do.
When you're running a business, that's not always the best practice. We are going to be incredibly disciplined and deliberate to focus first and foremost on the cancer care continuum. We believe that's where the biggest opportunity is for us to grow profitably and what we think will be best for investors as well. Third part of our pillar I just built into there, right? It's profitability. When you think about Myriad and how we have to differentiate compared to a lot of other options in the market for investors to choose from, it is going to be about our ability to grow predictably in this targeted high single digit to low double digit growth rate over the next three to five years, but also to do that in a very predictable, profitable way.
The other things that are adding to this positive momentum, what's different from last year, it's about the team. I think who you have on the team, the leaders you have on the team really makes a difference. Excited to have Ben here. I know we'll get to talk to him in a moment. Ben is all about, he shares with me this passion for execution excellence, all the details of blocking and tackling the things you have to do. I also felt like we needed more people as part of the team that really understand our space of genomics, genetics, cancer diagnostics. Brian Donnelly has recently joined as our Chief Commercial Officer. Brian was at Ancestry for many years as a Chief Commercial Officer. They built some real meaningful, durable value there.
Years ago, Brian and I worked together at Illumina, so we know what this relationship looks like. We've also added, and I won't go into everyone, but Vishal Sikri, who's joined us as our SVP of Product a few months ago. Vishal was the leader that really drove the commercialization and on-market adoption of NeoGenomics, MRD tests, and so forth. I think the right team is going to really add energy in this momentum. Third, it's about starting to establish a pattern of the most fundamental thing based on my agile upbringing, which is do what you say you're going to do consistently. That's what we intend to do. We have a couple of quarters of that, and we intend that to be the norm, not the exception.
Lastly, and we'll talk more about it, is to have a steady stream of attractive, meaningful products that we bring to market. We feel that. We have a number of products. We just launched our updated MyRisk hereditary cancer panel last week, but we have a number of new products over the next 12 months to come. Again, positive momentum. We feel like we have the right team. We're putting the right discipline in place. We have the right stream of products coming out. We can grow this in a predictable, accelerated way.
Super helpful. One thing, Ben, you've been with the company for about, is it 14 years?
That's right.
It's interesting, Sam. I feel like Ben coming into the role is, I think, an acknowledgment of you want to change and evolve the leadership, but you want to maintain some continuity with what's already been strong at the company. Is that the right way to not to put you on the spot, Ben? I know you're right here with us on stage, but is that a good way of thinking about this?
Absolutely, Doug. I would say, listen, Ben has really led almost every part of our finance organization. He's got a great.
Absolutely. When I was a COO for the first 14 months or so, Ben was my financial partner. We also know what this relationship looks like with each other. He still chose to stay, which is good news. It's good news. No, that's great. Sam, what you described, I mean, that's consistent with the multi-year plan to drive high single digit, maybe low double digit revenue growth and expand margins. I mean, essentially, and I know it's not easy, but what you outlined is consistent with how the company gets back to that. Is that right?
Absolutely.
Okay. Now, you talked about no favorite kids. You've also talked about, and I think the direct quote was like, "Nothing is off the table." At this point, are we pretty late in the portfolio evaluation process? Is this the portfolio that you want, or is there still a chance over time that you would make further changes?
Yeah. You know, I realized I didn't answer part of your question on the last question. I'm going to start with that and then answer this one, which is you said, "Hey, where are we in terms of the transformation, the new Myriad? Where are we?" Because they tie together. I would say we're very early, right? We're getting the right team. We have the clarity of direction, all the things that I said. If it was a nine-inning game, we're just getting going on maybe the first inning, right? That's where we are. I think we're rounding off with a good first inning, but it's so far to go. We're going to get there. As it relates to the portfolio and how it plays out, again, what I can tell you is our absolute conviction of the cancer care continuum.
I will say that what is different than before is that it has to be more than hereditary cancer. By the way, we see a real opportunity in the 5 plus 2, $7 billion market for hereditary cancer to grow high single digit, double digit. We have done that last couple of quarters. We have a new product. We have the new ways we are going to activate our sales team and so forth. The real opportunity in the cancer care continuum is expanding into these other attractive high-growth opportunities, right? Partnership with SOPHiA GENETICS, I know we will talk about in a bit, is part of how we get into therapy selection, liquid biopsy, our own MRD, or things like that. That and really enabling that and becoming more than hereditary cancer is our absolute top priority.
For the other two businesses, it's being able to do it in a very predictable, managed, resource-focused and funding way. We will continue, as you run a tight business, to look at, are all the lines of business truly supporting what we need to do? We remain open to the possibilities of what it could be. I'll tell you, some of the things that we've also learned, right? First, you make what you can make happen with what you have. We are pleased with the progress we've made with GeneSight, for example, even this year, right? We're not anticipating a change from UnitedHealthcare. If it does, it would be a complete bonus. Being able to grow from less than 2% the first quarter now to 8% last quarter, we see a way to grow that in the mid-single digits.
Long answer, I'm not saying that all the pieces that are here are here forever. We will focus and prioritize cancer care continuum. If that means there are some choices we get to make, we're open to that.
I do, in a minute, want to talk about things like SOPHiA MSK. As I'm bringing that up, I'm also thinking about the partnership you did in digital pathology. Is part of the, my words, not yours, but the new Myriad about also acknowledging where you have really great infrastructure and if you do not have the right product at the right time to make sure that you can kind of find a way to drop it into the infrastructure and get more out of it, one plus one equals three scenarios. Is that something you're leaning in on more?
100%. I'm glad you brought it up. Right. The traditional Myriad has been, good, bad, or otherwise, that it's all Myriad, all the way from ideation through product development, through commercialization and support. As you just mentioned there, we believe we have some really differentiating capabilities, be it our lab operations, be it our commercial reach, be it our regulatory capabilities and so forth that we can really leverage. The other thing is, even if we were good at things, we're good at a lot of things, time to market is so critical on these high-growth opportunities. There's no way we can get there quick enough. Case in point, liquid biopsy. Yeah, we acquired these assets from Intermountain Genomics a couple of years ago now.
However, I just didn't feel we were going to get there quick enough with a compelling enough product with liquid biopsy for CGP. That is why SOPHiA's relationship is so attractive for us. Similarly, yes, long story short, Doug, absolutely. This is going to be one fundamental difference in the new Myriad going forward to be able to serve attractive opportunities quicker.
Ben, this might be a putting you on the spot question, but I mean, I think we've talked about what the aspiration is and the plan is for the company from a growth standpoint. Yeah, I think the question is how long it's going to take to get there. Are there levers to pull to hit the operating targets, even if the top-line growth takes a little bit longer to materialize the way you want it to?
Yeah. Sam's touched on the strong infrastructure that we have. At the revenue levels that we're at, we have scale in our business. We've seen that when we look at 2024 results compared to 2025 results and change in profitability relative to product mix. We're committed to growing revenue faster than OpEx. We'll do that. Obviously, there's more profitability as the revenue grows faster, but we have scale at the level that we're at.
Recognizing we're still in 2025, but as we think about 2026 or even just the next several quarters, Sam, what are the KPIs that you want us to look at as we measure success and progress for the company?
It's a great setup, right, Doug, in that please be patient until the January timeframe where I will provide you, it's a great question, KPIs that we'd recommend. What I can tell you right now, let me at least talk to the internally, how are we managing, how are we measuring, pardon me, the transformation and if we're making progress on what we're doing, some of which would be the measures that I think we would recommend you all track. By the way, commentary, I think part of Myriad's opportunity is we've provided a heck of a lot of numbers. In fact, to the point where it's like, what does this all mean? I think our opportunity is to simplify and say, "Hey, if these four or five things are on track, we believe here's why these are the most important measures." That will be something coming.
That being said, internally, listen, Doug, it's a lot of the ones you think about. We are obsessive about volume by each major product line. How are they growing relative to our targets? We are obsessive about the fundamental financials of revenue, adjusted EBITDA, EPS, gross margin, where we're one of the industry leaders. A new one that we're really focusing in on, true to our updated strategy, what is our allocation in every quarter of resources, dollars, even focus, management time that's being spent on the cancer care continuum versus anything else? Customer, another huge category, increasingly important as we think about the new product launches, we'll talk about in a moment. Do we have the number of targeted customers? Are we getting repeat orders? What's the NPS? Are they happy with that?
These are some of the measures that we are absolutely tracking on the inside for our change.
Okay. Super helpful. Let's talk about oncology and, as you put it, the cancer care continuum. So hereditary cancer testing, I think you're tracking to around $370 million in revenue this year. It counts for 45% of sales or so, growing in the low single digits. This is obviously a big part of the Myriad story. You're growing in a pretty balanced way between oncology and unaffected from a volume growth standpoint. I think for a while, a lot of us, and I'll throw me in there, I started to think of this as being a more mature market. Maybe it is, but you're still growing. We look at some of the peers. You see robust growth.
In a way, I guess what I'm building to is, should we think of this market as maybe being a little less mature than we might have thought a year or two ago?
Absolutely. I mean, listen, if you break down the data, if you look at the details, it's two segments in one, right? When we talk about overall hereditary cancer testing. If you look at the oncology segment, it's about $2 billion. It's the more penetrated one. There, we have been able to reaccelerate our growth. The catalysts and the drivers for that include more of a focus, includes now going forward, the updated panel with now 63 genes, including all the relevant NCCN and ASCO guidelines.
On MyRisk.
On MyRisk, excuse me. Yeah. That really allows us for catalysts there. We think we're going to continue. As you know, the biggest single driver of adoption for us or anyone else there, and us being the gold standard definitely helps us disproportionately, is updated guidelines. We have continued to see over the last 18 months a number of increased guidelines. For example, here's a fact that I don't think we've shared publicly before. We see a real opportunity for continued growth in the oncology segment tied to the aura effect of other products. For prostate cancer, in urology, we are starting to see a really nice connect rate for those urologists who are ordering Prolaris also starting to order that. Why? Because now it's in the guidelines.
NCCN says even for prostate cancer that there is to select the course of treatment that hereditary cancer has a place. I think as we get into MRD and other applications, liquid biopsy, there's going to be a positive effect. If you order that from us, you're going to order that, our MyRisk. Unaffected, this really speaks to, Doug, your question of how mature is it? Absolutely. If you look at the data, one would say using the inning baseball analogy, maybe we're in the fourth or fifth inning at best.
Yeah, if that.
Because if it's a $5 billion market, which is less than 30% penetrated, what a great opportunity. What we know, it has different dynamics. To really grow this market, it's about activation. That's where our breast cancer risk assessment programs, where we really arm our healthcare systems and family offices, how do you even identify potential patients? How do you programmatically give them all they need to identify, qualify them, and then help them and pull them through? By the way, one of the things we also have not talked a lot about yet, we made some changes about three weeks ago in the company to really reorient, take out layers, go away from business units, and really focus in on the go forward, cancer care continuum and so forth.
One part of that related to hereditary cancer is as we go into next year, Doug, and this is an important catalyst, we're going to restructure our sales teams or we're going to have more dedication to the unaffected because it's just time and effort that you put into growing that. I think there's so much market to be had.
Does that also leverage the existing infrastructure on the women's health side as well?
Absolutely. It builds on it, right? We're going to do that a little bit differently going forward, but yeah.
Okay. So that's something I have heard a little bit about these changes, but not a lot. Is that something we'll probably hear a little bit more about heading into next year?
That's exactly right. Yep.
You mentioned Prolaris and some of the ability as guidelines evolve to basically almost cross-sell, I guess, is the clumsy way I'd describe it. I brought up AI-enabled, essentially the AI-enabled version with Pathomic to reaccelerate the franchise. What is the opportunity there? How long do you think it takes for Prolaris and the digital AI product to really start to be able to go out there and play offense aggressively?
Yeah. We think it starts in 2026. Clearly, what we've been doing this year, we've been kind of holding steady, which is definitely not winning in a growing market. That means we're still not where we need to be. What we found by talking to dozens of urologists, even as part of our decision to partner with Pathomic, is that they value a complementarity of a digital report based on pathology to go along with molecular. Now, I think that it's to be seen if the market, the urologists, the community are all in for just a pure AI.
What will be unique about our test is it will be truly the combined power of everything you still get with Prolaris, which is the molecular element of it, with AI, which is looking at morphology of stained slides, of cells on stained slides, and together being able to present an answer, but also allowing the urologist to say, "Hey, in those cases where it's kind of a gray line, what's the information that AI or molecular could tell you that gives you a higher statistical confidence in what you do?" That's part one. We think that in itself is going to be, oh, by the way, I should say, what's going to make Myriad unique at the point that happens, we would be the only company that offers AI, molecular, as well as the hereditary cancer, precise tumor, all of those components because they're all important.
That's what we're starting to see the connection already. I do say that beyond 2026, the bigger opportunity for Myriad is in 2027 when we bring our second product to market, which really enables not only time of biopsy, but post-radiation, post-radical prostatectomy, because that for us is a blue ocean. That's only being served by the competitor today. I think that enabled through the AI combined with molecular will give us a brand new opportunity for growth that just hasn't been in our numbers at all.
It's also interesting, and again, I may be saying some of what you just said a different way, but I think coming into 2025, there was a lot of focus on the possibility that digital pathology could be a replacement for some of the legacy tests, including Prolaris. I think we've seen a clear movement, including in guidelines to treat these as complementary products. With your portfolio, you're, I think, uniquely positioned to offer basically both sides of this, both the digital as well as the traditional, and then you layer in new products.
You're right. You said it another way, and I believe what you said.
Okay. I didn't mess it up. That's good. All right. I have a few MRD questions, but maybe I could just ask you to make my life a little bit easier just to kind of describe how you're differentiating in MRD relative to others and how we should think about the program in terms of what comes next.
Yeah. Hey, Doug, we are really energized about the upcoming launch of Precise MRD. That's our MRD assay. The reason that we believe that we can build a meaningful franchise and revenue stream here over time is the following. First, it is the assay. The assay is differentiated in the methodology, the techniques that we use, being able to look at, I know now in the industry we're talking about ultrasensitive, so we need to create a new term. Maybe it's the ultra-ultrasensitive, where you're able to look at down to one to five parts per million in circulating tumor DNA. That is going to be particularly important for those low-shedding tumors where that level of detection matters. We're talking breast, ovarian, prostate, and other renal, other cancers like that. We have that differentiation.
We are no fool to think that, "Hey, great, we got all this performance, choose Myriad." I think it is going to be the combination of that, plus the fact that we are an absolute trusted partner for the breast community, for the ovarian community, and so forth. You will see in a lot of places, our focus will be to leverage the trust, the trust that you have in Myriad, the reach that we have, the established relationship, the EMR connectivity in the community together with the assay. Third, what we are really finding from the early work that we are doing with collaborators is that there is increasing, we think about a molecular tumor board who is really making the decision in a timely fashion what to do with a particular patient. They are looking at multiple data points, right? They are looking at HRD. They are looking at hereditary.
They're definitely looking at CGP, conference therapy selection, liquid. To have these together, not just have it, but to integrate them into a report that makes it easier to interpret. We already, by the way, have a lot of these integrated. We think that combination together with a differentiated test, with what we're going to do with our sales team, part of the changes we made and we announced is an investment of $35 million over the next couple of years. Big part of that is related to commercial capability we're building. We started hiring already this quarter in advance and the training we're doing. These are the things that I think will really allow us to differentiate and have a part. Now, if I can just take another moment, maybe it's going to be a question, but I'll just keep talking until you stop me.
No, keep going.
You will. At the end of the day, it's all about the data. If the data and the science doesn't prove out, it ain't going to matter.
Yeah, I was going to ask. I think you've described it as a controlled data-driven launch. I'd love you to kind of talk about what that means and how it differs from what you've seen others do here.
Yeah. So first, let me start on the data part, and then I'll talk about the launch next year, the controlled early access launch, as we're calling it. We have shown important actual clinical validity, clinical utility data starting at AACR, at ASCO. I'm happy to report that San Antonio Breast Cancer Symposium coming up. We have two late-breaking abstracts now, which will be on the MRD study, which will be the first one going in for MolDX for breast, right? All of this is a growing stream of clinical data which will help substantiate not only for MolDX, but we know that's only one part. It's really about how do you drive adoption and confidence in the markets that we serve. We feel good about that. The strategy for next year is within the first half, of course, to submit for MolDX.
The intention of the controlled launch, if you will, is we want to make sure that we get it right, we get the experience right. We will be targeting a significant number of actual oncologists, and they will be using it for real testing, and we will seek reimbursement. By the way, part of the reason for the controlled launch is we also want to manage our finances because we are not counting on getting paid for. We are leaving ourselves nine to twelve months for MolDX. We know sometimes it could be quicker. If so, then it becomes a good guy in 2026 that we are not counting on.
You can lean in more, if you will.
We can lean in more. That is why really next year is the setup for 2027. 2027 would be unleashing the full commercial launch. In January, I will also share more about beyond stage two, stage three breast cancer, more of a roadmap because also to serve the community and to fulfill Myriad's opportunity, all the things I said, you cannot just have breast cancer. You cannot just have stage. What are the other things we are going to bring to market? I look forward to sharing more about that too.
No, and it'll be great to go beyond breast, but the reality is I still think there is a need for higher sensitivity in a cancer where it's a bad shutter. I do think there's an opportunity and you have the infrastructure. It is an exciting platform or program, I should say. As we think about 2026, I mean, you talked about maybe the right way to think about reimbursement timelines with MolDX. Obviously, the buildout related to the program is going to be tied to your ability to generate revenue there. Is there another leg to this with pharmaceutical partners next year?
Oh, I'm glad you reminded me, Doug, of that. Absolutely. It's not even next year. That's something we've been actively doing. Now that we actually have so many more pieces of data that not only helps us with market adoption in a clinical setting, it also has really helped us in our conversations with pharma. We have multiple pharma programs going now, and we think next year, another very important means by which we not only validate, but drive revenue immediately in advance of MolDX from MRD is through pharma partnerships. That's already underway, and it'll only accelerate next year.
We talked a little bit at the beginning about the SOPHiA GENETICS Memorial Sloan Kettering liquid biopsy collaboration. This, like you said, pushes you more broadly and deeper into the cancer care continuum. How do you see this part of the business ramping over the next few years?
Yeah. We are delighted with the partnership. First of all, just to describe the relationship here, SOPHiA did a really nice job over the last couple of years cultivating a relationship with Memorial Sloan Kettering right down the road here, who are known for being one of the true pioneers in liquid biopsy, in tissue biopsy first with MSK Impact, but also MSK Access, which is their liquid version.
The opportunity we see collectively is many pharma partners in particular, they had come to us and also to SOPHiA and to MSK saying, "Hey, the way pharma works, you usually start and often just stay in your model within a notable reference lab." What we bring to the equation along with the core assay coming from MSK, a lot of the informatics and the great things SOPHiA has done is a world-class lab, a proven partnering capability with pharma to do biomarker discovery, validation, and CDX development, including working with the FDA for registration. That is the partnership. We expect to start ramping up relationships that are directly tied to this starting in the first quarter of next year and growing from that.
We absolutely have the opportunity to then take such an assay or a derivative of it ahead of that if we choose to, to make it a clinically offerable, a clinical assay that we offer in advance of that just as part of our portfolio as well.
Maybe just to wrap up on the cancer continuum, we'll unfortunately not be able to talk about some of the other exciting parts of the business, but I think this was, at least in my humble opinion, maybe the most important thing to talk about, not to take anything away from the other kids. As we sit here with hereditary profiling, you now have therapy selection, you have MRD. If there's one high-level takeaway in terms of the portfolio you're building, you are now on the cusp of having everything that you need to compete unencumbered in the cancer continuum market. Is that a fair way of putting it?
Absolutely. I think we would be, again, using the analogy of innings or where we are, early stages because you've got to grow the portfolio and you've got to build the customers. Having access to the fundamental assay technologies, yes, liquid biopsy now through this partnership, check. I think it's not just a liquid biopsy, it's one that has a reputation and a reach. That's one. MRD, we are really excited about MRD. The only thing is just to manage expectations, it's going to be an intentional gradual volume increase, right? The catalysts, yes, that go along with it will be what I'm able to share of what are other things that we will announce in terms of studies and other submissions to MolDX, which will help build out for 2027 and 2028. Then prostate cancer, right?
Because I think most would agree that if and when we intend to, we can start growing that highly profitable franchise again, that is a real good guy opportunity for Myriad. All of these things together, we haven't talked about HRD, and I'll just summarize by saying beyond ovarian cancer, through partnerships we are having with pharma on specific programs for other tissues, we see an expansion opportunity which will drive both near-term revenue, but then add to our portfolio. Yes, I think we will always have pride and a place for our hereditary cancer franchise, but now we are starting to actuate the initials of how are we going to really serve the full cancer care continuum in a profitable, predictable way.
Yep. That sounds great. We are excited to hear more as we move into next year. In the meantime, we really appreciate you doing this. This has been really helpful. Thanks for being here.
Thanks for having us, Todd.