Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics Second Quarter 2016 Financial Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded February 2, 2016. I will now turn the conference over to Scott Gleason, VP of Investor Relations. Please, go ahead, sir.

Good afternoon and welcome to the Myriad Genetics fiscal second quarter earnings call. My name is Scott Gleason, and I'm the VP of Investor Relations. During the call, we will review the financial results we released today, after which we will host a question-and-answer session. If you have not had a chance to review the earnings release, it can be found on the Investor Relations section of our website at myriad.com. Presenting for Myriad today will be Mark Capone, President and Chief Executive Officer; and Bryan Riggsbee, Chief Financial Officer. This call can be heard live via webcast at myriad.com. The call is being recorded and will be archived in the Investors section of our website. In addition, there is a slide presentation pertaining to today's earnings call on the Investors section of our website and which has also been filed after the market closed today on Form 8-K. Please note that some of the information presented today may contain 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 with 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 actual results to differ materially from those contained in our projections and forward-looking statements. With that, I'm now pleased to turn the call over to Mark. Mark C. Capone - President & Chief Executive Officer: Thanks, Scott. Good afternoon and thank you for joining the call today. I'm…

Thanks, Mark. I am pleased to provide an overview of our financial results for the second quarter. Second quarter total revenues were $193.3 million compared to $184.4 million in the same period in the prior year. Importantly, we delivered our third sequential quarter with year-over-year growth with revenue increasing 5% compared to the same quarter in the previous year. We remain confident in our ability to grow on a year-over-year basis every quarter this fiscal year. Hereditary Cancer revenue was $166.6 million in the second quarter and grew 1% year-over-year and 6% sequentially. The second quarter is typically our strongest quarter from a seasonal perspective because patients who have met their annual deductible or have additional funds in cafeteria plans are more likely to undergo elective testing. Vectra DA revenue in the second quarter was $11.3 million and was up 5% year-over-year. However, volume was up 13% year-over-year. As Mark mentioned, revenue was negatively impacted by the ICD-10 coding transition, and the difference in volume and revenue growth was largely attributable to the ICD-10 impact. Prolaris revenue was $1.9 million in the second quarter and reflected Medicare reimbursement that began on October 15, 2015. As Mark mentioned, Prolaris volumes were over 3,500 tests which was up 104% relative to the same period in the prior year. Revenue associated with our pharmaceutical and clinical services business was $10.7 million and was up 106% year-over-year. Most of the growth on a year-over-year basis was attributable to the acquisition of the German clinic which occurred in last year's third fiscal quarter and was consequently not reflected in the fiscal second quarter 2015 financial results. Gross margins were 79% in the second quarter compared to 79.5% during the second quarter of last year. Our hereditary cancer gross margins in the quarter were consistent with…

Thanks, Bryan. As a reminder, during today's call, we use certain non-GAAP financial measures. A reconciliation of the GAAP financial results to non-GAAP financial results and a reconciliation of GAAP to non-GAAP financial guidance can be found under the Investor Relations section of our website. Now, we are ready to begin our Q&A session. In order to ensure broad participation in today's Q&A session, we're asking participants to please ask only one question and one follow-up. Operator, we're now ready for the Q&A portion of the call.

Certainly. And the first question comes from the line of Jack Meehan with Barclays. Please go ahead.

Hi. Thanks. Good afternoon, guys. I want to start and ask another question on the guidance that you've laid out through the rest of the year. I think I understand some of the moving parts from 2Q to 3Q. But I want to ask, one, with some of the new longer-term contracts in the hereditary side, was there any incremental change in the pricing? And then also bridging from 3Q to 4Q, what are some of the things that step up in the $760 million at the midpoint? Mark C. Capone - President & Chief Executive Officer: Yes. Thanks, Jack. This is Mark. I'll take the first one and then Bryan, you can take a second. So, I think from hereditary cancer perspective, obviously, we're pleased we were able to sign significant additional contracts this quarter. So we're now up to 61% from the 50% level. We don't talk about the details of the prices that are in those contracts. We're not actually allowed to do that without discussion. But what I would say is, if you know that our guidance around operating margins has remained the same. We haven't seen any change in operating margins. Our operating margins we expect to be up 200 to 300 basis points this year over where we are last year and all of that contemplates the pricing that's contained in those long term contracts. So, I think from that you can understand where those contracts are from a pricing perspective. Bryan?

Yeah. And then, Jack, I guess just in terms of the guidance, upsides that we would see would be as we outline the expanded indications in endometrial and colon cancer as well as retrospective Prolaris back-pay and then just a continued acceleration in Prolaris and Vectra DA volumes. So those would be things that we would point to that would sort of shift us towards the upside.

Got it. And maybe just to follow up on that, to still get to the $760 million at the midpoint, if I assume $184 million for the third quarter, I think you would need to be closer to $200 million in the fourth quarter. To get to the midpoint, do you need any of the retrospective Prolaris or the additional indications in hereditary cancer to kick in to get to there?

No.

Okay. And then just one more on Prolaris, just plans around the sales force with the volume numbers coming in clearly, I think, better than we were expecting. Do you feel like now is the time to push ahead, expand the sales force, and then what do those volumes look like, just the trajectory through the end of the fiscal year? Thanks. Mark C. Capone - President & Chief Executive Officer: Yeah. Obviously, we would agree we've been very pleased with the volume trends that we've seen in Prolaris. I think the team has done an excellent job differentiating the product and taking advantage of the two unique aspects of Prolaris with an active surveillance threshold and the ability to be used across the entire spectrum of risk for patients. So we think that's been successful. We have been very pleased. And we will continue to evaluate whether or not it's appropriate to add additional salespeople now that we've obtained Medicare reimbursement. So, those are our decisions that we'll continue to evaluate. We know there is room to expand the sales team because right now we can only access probably half of the urologists in the country. So, I think that opportunity certainly presents itself. We haven't provided any guidance on ongoing run rates for Prolaris through the rest of the year. But, obviously, our revenue guidance contemplates our projections on where we might continue to see Prolaris grow sequentially over the next couple of quarters.

Our next question comes from the line of Shawn Bevec with Deutsche Bank. Please go ahead.

Yeah. Thanks, guys. Just a question sticking with the guidance real quick, the hereditary cancer test guidance, I believe, you gave for the full year was roughly 1%. I was curious if there's any change to that because based on where you've come in so far in the first half of the year, it looks like that has to go down year-over-year in terms of the growth. Is there any update there? Mark C. Capone - President & Chief Executive Officer: Thanks, Shawn. No, no real update. We obviously saw 4% year-over-year growth in the first quarter. It's important to note that there were some comparables in the first quarter the previous year that because of the myRisk transition that caused that 4% number to be a little higher on a year-over-year basis. 1% is what we saw in this quarter year-over-year, consistent with our guidance. So, we haven't really changed our thoughts around the guidance specifically for hereditary cancer for the year.

Okay. Then my follow-up, with regard to the incoming requisitions for myRisk, how many requests are currently being made for BRCA versus all of the other cancers that the panel covers, and how broad are the reimbursement guidelines at this point for physicians to request a myRisk test for indications outside of breast and ovarian cancers? Mark C. Capone - President & Chief Executive Officer: Yeah. So, on the last call, we had talked about the fact that essentially 100% of our targeted physicians are ordering myRisk instead of our single-syndrome testing. And so that targeted market really at this point is fully converted. The only physicians that hadn't converted were those that we call non-targeted physicians. These are infrequently ordering physicians. And for those physicians, they literally mainly order once a quarter, once every other quarter. And so, in those cases, it will take longer for us, ultimately, to convert all of those physicians. For example, many of the non-targeted physicians that ordered this quarter were not necessarily physicians that ordered last quarter. So this was the first time we had an opportunity to reach out to them. So, we said the remainder of that is going to be a slow trajectory to ultimately transition the rest of those non-targeted physicians. But we continue to be pleased to see that all of our targeted physicians have essentially fully converted. We're still in the process of gaining coverage decisions specifically for myRisk and that, we know, will be based on broadening NCCN criteria. 19 of the 25 genes are already in NCCN guidelines, and we're continuing to work to produce additional data that will broaden those coverage guidelines. As that occurs, that will allow us to reach out to payers and modify their coverage decisions as well. So, I think it will be an ongoing process to get coverage updated for myRisk. And in the interim, payers are satisfied with us billing the genes that are covered under our current contracts, and so that's how we continue to run the tests that are being ordered and then billed for whatever has been contracted at this stage for each of the payers.

Thanks, guys.

Our next question comes from the line of Bill Quirk with Piper Jaffray. Please go ahead. Alexander D. Nowak - Piper Jaffray & Co (Broker): Great. Good afternoon, everyone. This is actually Alex Nowak, filling in for Bill today. So first one for me. So, for the 39% of hereditary revenue not under a long-term contract, I guess just why haven't these payers signed on and signed the three-year contract? I guess, what are you hearing from them? Mark C. Capone - President & Chief Executive Officer: Yeah. Thanks, Alex. I think what you see and increasingly we're getting to some of those smaller regional payers, in order for a payer to do an evaluation of their hereditary coverage decision, it really requires an extraordinary amount of scientific evaluation. Obviously, these tests are not equivalent in order to assess the differences to fully appreciate the accuracy levels of Myriad's testing, the ability to classify variance, the quality systems that we have in place to ensure that only appropriate patients are tested, and the impact that these highly accurate tests will have on reducing healthcare costs, all of that requires an extraordinary commitment from payers. And so as I said in my comments, we think by the end of the year, we will have contracted with all of those payers that have decided to dedicate resources to evaluate their hereditary cancer portfolio. We continue to believe that there will be a number of payers particularly smaller regional payers that have just decided they're comfortable with their current coverage and are not going to do any sort of policy assessment. And so, we don't necessarily expect that number to get to 100% as those smaller payers. The other thing you have to remember that has been pointed out by other analysts is…

Our next question comes from the line of Derik de Bruin with Bank of America. Please go ahead.

Hi. Good afternoon. Mark C. Capone - President & Chief Executive Officer: Good afternoon, Derik.

So, could you guys give us some idea on what potential catch-up payments or back payments could be for Prolaris? I mean, is there any rhyme or reason in terms of how that's negotiated or calculated? It looks like from other companies, it could be all over the place. Is there any guidance you can give us on that? Mark C. Capone - President & Chief Executive Officer: Thanks, Derik. I wish we can provide more clarity, but all over the place is probably a fair characterization of this. There's no statutory requirements. And so, you can look back at the Prolaris decisions and certain time points, final recommendations by MolDX were made, final LCD in January. It be became effective in March. And then there were subsequent time periods all the way until October 15. And so Medicare could choose any of those dates or none of those dates as a potential go forward point for retrospective reimbursement. So, it's hard to say because there's no statutory requirement and we just continue discussion with Medicare about what we might think is appropriate for some of that legacy reimbursement.

Great. And then just one question, one follow-up question, on the hereditary cancer market, when you look at all the expanded indications and what's going on, the work that you're doing to expand the markets, like, how do we think about an overall growth rate for the hereditary cancer market on a go-forward basis? Thank you. Mark C. Capone - President & Chief Executive Officer: Yeah. Thanks, Derik. Historically, we've seen this market grow at around 10% per year; and as you saw in the Analyst Day when we put together Monte Carlo for the go forward years, we had that growth rate anywhere between 7% to 15% as the growth range. We continue to think 10% is a reasonable expectation for growth in this market. And when we put together that five-year plan, we had already contemplated that in fact these expanded indications would be available. So, I think all of this is consistent with that plan. I would underscore that again when you look at an oncology market that's only 15% penetrated based on these new indications, a preventive care market that's only 4% penetrated based on these indications with very large total addressable market, we think there's ample opportunity to support those types of historical growth rates.

Our next question comes from the line of Jonathan Groberg with UBS. Please go ahead. Mr. Groberg, your line is open. Please check the mute function in your telephone. Mr. Groberg?

Operator, let's just go ahead and take the next question, please.

Okay. One moment please. Our next question comes from the line of Isaac Ro with Goldman Sachs. Please go ahead. Joel Harrison Kaufman - Goldman Sachs & Co.: Hi, guys. Thanks. It's Joel in for Isaac. Just a question on capital allocation. Can you maybe just help us think about how you guys are thinking about M&A versus buyback? And then, is there any reason you guys wouldn't be more opportunistic on M&A given the valuations we're seeing on the market today?

Yeah. Sure. Thanks for the question. Just in terms of our prioritization, we obviously would prioritize, and as stated that we would prioritize, M&A above share repurchase. And we have an active program for looking for opportunities. The landscape in molecular diagnostics is rather sparse, especially for the types of targets that would meet our filter. So, while we remain active in the absence of things that would meet our criteria, we look to our share repurchase program and that's why you've seen us continue to buy back our shares, 600,000 shares in the quarter, $42 a share. So, we're still committed to the buyback program. Joel Harrison Kaufman - Goldman Sachs & Co.: Great. And then just one on the UNH policy document, can you maybe just dive in a little bit deeper and clarify how you're interpreting the guidelines? I mean, I think there's a comment in there about specialized ongoing training. Just to understand why the majority of the claims wouldn't be denied if the docs haven't actually had that specialized ongoing training. Mark C. Capone - President & Chief Executive Officer: Yeah. Thanks, Joel. So, the way the UnitedHealthcare policy is written is it's entirely consistent with decades-old policies from ASCO, ACOG and a number of other breast cancer, SPS and others. What the policy requires is for the physician to do a self-attestation that, in fact, they have had sufficient training to be competent in doing hereditary cancer testing. So, it's up to the physician to make that determination and to declare that determination to UnitedHealthcare. Now recognize, we've, through the years, had over 90,000 physician order tests from Myriad. Tens of thousands do so on a routine basis. And so what we've seen is that all of those physicians have, in fact, attested to the fact that they are capable of providing genetic counseling. It's important to note that the reason ASCO and ACOG have both taken public positions about the capabilities of their members is that they have received training and counseling. As you might imagine, an oncologist is often faced with communicating very challenging and difficult information to patients as is an OB/GYN. And so throughout their medical profession, they've received a lot of training on how to provide counseling. Many have taken short courses that have been offered by these medical professional societies, et cetera. And so that's why these societies have all said they believe all of their members are capable of providing this service and we have seen all of these members attest to the fact that they are. So, it's really just a self attestation on the part of the physician as to whether they can do this and like I said, to date, we've seen all of our physicians that have stated their competency in providing this. Joel Harrison Kaufman - Goldman Sachs & Co.: Thanks.

Our next question comes from the line of Amanda Murphy with William Blair. Please go ahead. Aurko Joshi - William Blair & Co. LLC: Hi. Actually, this is Aurko in for Amanda. I know you guys spoke to the competitive dynamics a bit and I was wondering if you could elaborate on that on Prolaris especially given now there are two products the market and I was wondering if you had any ideas as to what the market share you have out of the gate. Thanks. Mark C. Capone - President & Chief Executive Officer: Yeah. Thanks, Aurko. We were very pleased with Prolaris' performance, obviously, 104% year-over-year and very high sequential growth rates as well. We were pleased that Prolaris has continued to perform well. It's difficult to know where other competitor volumes may be. I think we'll probably hear that on future calls and can probably provide then a more adequate assessment about what market shares may be. But we think with 3,500 tests, we're certainly the market leader at this point, and we've seen physicians that have really gravitated towards Prolaris because its endpoints are the endpoints that they're most interested in which is prostate cancer specific mortality with a very clear report that shows which patients can safely pursue active surveillance versus those that aren't. And the other thing is they know they can use this test across all risk profiles which is the only test that can do that. So, I think that's contributed to our ability to very successfully compete for market share and we're excited to see how that continues into the future. Aurko Joshi - William Blair & Co. LLC: I guess just one follow-up question on that regarding the old risk profiles, what do you guys see as the timeline maybe…

And our last question comes from the line of Tim Evans with Wells Fargo Securities.

Thanks. Mark, I think in the past, you said it's a little hard to tease out the companion diagnostics piece of the hereditary franchise. But I was wondering if you could give us any directional color on what you feel like the companion diagnostics growth is versus the non-companion hereditary business. Mark C. Capone - President & Chief Executive Officer: Yeah. Thanks, Tim. You're right. It is, at least with the companion diagnostic indications that we have today, it's really difficult to isolate that from hereditary cancer. The reason is the patients that are indicated for use for the current companion diagnostics are all ovarian cancer patients. That's the same indication that's eligible for an hereditary cancer test. And so in many cases, physicians that used to order the BRACAnalysis tests are now ordering BRACAnalysis CDx. And in that case, it's really just cannibalizing what would have been hereditary cancer sales. So, it's really difficult to tease those out, which is why we've chosen just to keep those all as a singular hereditary cancer revenue line item because, otherwise, I think it would just be too confusing. I think the opportunity for companion diagnostics to really grow the market will be for things like when we get myChoice HRD approved as a companion diagnostic for some of these newer indications, for platinum use or for PARP, I think that's where you really see the opportunity for expansion of the companion diagnostic market. The other part is the tumor BRACAnalysis CDx product which we've launched in Europe. And because AstraZeneca is still seeking broad-scale reimbursement for olaparib in Europe, that really meant that the tumor BRACAnalysis CDx companion product is not going to get broad utilization until we see more significant reimbursement for the drug. And that process is ongoing. So, I think as a result of that, we've just lumped all that into hereditary cancer and I think that cannibalization then is something that we don't have to try to tease out.

Fair enough. And then, quick follow up for Bryan. Are you able to put a little finer point on the long-term tax rate given the restructuring here?

Yeah, I think, Tim, what I would say is just lower than 40% for the year and that the second quarter was artificially low just given the fact that the R&D tax credit is a full calendar year catch up and the international restructuring was more than one quarter, so it's a couple of quarters worth. So, I would say that the second quarter was artificially low.

Okay. Thank you.

You're welcome.

There are no further questions at this time. Mr. Gleason, I'll turn the call back over to you for your closing remarks.

Thank you. This concludes our earnings call. A replay will be available via webcast in our website for one week. Thank you again for joining us this afternoon.