Ladies and gentlemen, thank you for standing by and welcome to the Myriad Genetics Fourth Quarter and Year End 2016 Financial Earnings Conference Call. As a reminder, this conference is being recorded today, Tuesday, August 9, 2016. I would now like to turn the conference over to Mr. Scott Gleason, Vice President of Investor Relations with Myriad Genetics. Please go ahead, sir.

Thank you. Good afternoon and welcome to the Myriad Genetics fiscal fourth 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 will be a slide presentation pertaining to today's earnings call on the Investors section of our website and which has been filed following the call 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 document 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 the actual results to differ materially from those contained in our projections or forward-looking statements. With that, I am now pleased turn the call over to Mark. Mark C. Capone - President, Chief Executive Officer & Director: Thanks, Scott. Good afternoon and thank you for joining the call…

Thanks, Mark. I'm pleased to provide an overview of our financial results for the fiscal fourth quarter of 2016 followed by additional detail on our fiscal year 2017 financial guidance. Fourth quarter total revenues were $186.5 million compared to $189.9 million in the same period in the prior year, a decline of 2% year over year. While revenues in the quarter with within the range of our previously provided financial guidance, hereditary cancer revenue came in below our expectations. Total hereditary cancer revenue in the fourth quarter was $152.8 million and was down 2% on a sequential basis. The sequential decline was mostly attributable to some incremental market share losses concentrated in the oncology segment of our business. On a year over year basis, hereditary cancer revenue was down 7%, which was mostly related to volume declines and some incremental price declines consistent with the full implementation of the long-term contracts that have been negotiated. Vectra DA revenue reached a new record in the fourth quarter with total revenues of $12.7 million, which was up 8% year over year. Total volume was 41,300 tests which represented a 5% increase year over year. During the quarter, we saw improved collections on Medicare Advantage claims, which led to revenue growth outpacing volume growth. Prolaris revenue was $3.5 million in the fourth quarter. Again, Myriad experienced record volumes with total test ordered at 4,750, which was up 91% year over year and 11% sequentially. Revenue associated with our pharmaceutical and clinical services business was $12.7 million and was up 14% year over year. I now would like to discuss our financial metrics for the quarter. Gross margins were 78.6% in the fourth quarter compared to 80.3% during the fourth quarter of last year. The year over year decline was primarily attributable to product…

Thanks, Mark. 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 the 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.

Our first question comes from the line of Tycho Peterson with JPMorgan. Your line is open. Please go ahead.

Hey, thanks. I'll start with a question on guidance, which I'm sure is on top of everybody's mind. Can you maybe just talk about what's factored in terms of share and price erosion in the oncology assumptions? And given your comments about going back in-network with Blue Cross Blue Shield of California and the renewed United contract, can you maybe just talk about any pricing assumptions that are embedded with those? Mark C. Capone - President, Chief Executive Officer & Director: Thanks, Tycho. I'll start and then, Bryan, of course you can fill in if there is any other commentary. Obviously we considered all three of those things, as you mentioned, Tycho, what do we think will happen to market, what do we see from a price and what do we see from a share perspective. I think from a pricing perspective, what was important in the fourth quarter, this was really a first quarter that fully reflected all of the long-term contracts that we'd put in place, the 65% of our revenue that is under long-term contract. So the pricing in the fourth quarter, the results in the fourth quarter are reflective of that pricing, and of course, that's fixed for this next fiscal year. So that gives us pretty good visibility on pricing, at least in that 65% of the business that's locked up. Much of the rest of the business frankly are smaller regional players that have not necessarily expressed interest in evaluating their hereditary cancer portfolios. And so we wouldn't necessarily expect any material changes in pricing from those other regional payers. And so that leaves really a few others that we're in discussions with at this point, and any thoughts around those discussions that are ongoing have been reflected in any price assumptions that we've made for this guidance. So that handles the pricing piece. From a share perspective, as Bryan mentioned, we've chosen that to use the fourth quarter as our guide, as we look to provide guidance for this fiscal year. And so we've really used that trend we saw in the fourth quarter, the year over year trend between fourth quarter of last year and fourth quarter 2016 as a guide as we set the share expectations for the year. And so, and really it was that in combination that dictated our market growth assumptions as well. So the volume overall that we saw between fourth quarter of 2015 and fourth quarter 2016 really addressed both market and share. So that's the thinking that really went into the setting of our guidance from hereditary cancer. I think the philosophy is let's use current trends and let's use current reimbursement as the basis for guidance, reflecting that any improvements to those would be upside. Bryan, any other comments from?

Nothing to add.

And maybe just as a follow-up, what gives you confidence that you won't be moved out of network for other payers? I know you listed that as a risk, but how do we handicap that? Mark C. Capone - President, Chief Executive Officer & Director: Yeah, thanks, Tycho. Obviously, for the 65% that are under contract, that's already been resolved. It's really the remaining few that we're in discussions with. And like I say, a lot of the 35% that are not under long-term contract haven't really expressed an interest. So for the remaining ones that are under contract, as I mentioned in the script, our conversations have been productive. I think they continue to understand that the value that Myriad offers for accuracy is very important. I underscore that PROMPT data that's relatively recent, where up to 10% of patients may in fact receiving the wrong medical management and recognizing that that medical management, those mistakes are $100,000 mistakes. That's very important information to payers as they reflect on network options. And so I think we've had to continue to have productive conversations with those few remaining payers and I think that's all been reflected as we look at our fiscal 2017 guidance.

Okay. Thank you.

And our next question comes from the line of Amanda Murphy with William Blair. Your line is open. Please go ahead. Amanda L. Murphy - William Blair & Co. LLC: Hi. Good afternoon. So I guess just following up to Tycho's questions on guidance. So, if you do the math on the numbers, you're talking about quite a meaningful decline in revenue year over year and obviously you cited pharma as an issue there. But even if you assume $20 million, $25 million on that front, it does seem like the magnitude is quite meaningful even if you consider as well that there's market share growth in the hereditary cancer business as well as growth in the other products that you have currently generating revenue. So just trying to rationalize that with your comments on market share loss and pricing, I appreciate the points there in Q4 but it does feel like the magnitude is something quite larger as it relates to the trends that you saw in Q4 rolling forward. So, just wanted to get some context there in terms of is it something am I missing. It's not a contract that you're losing that you were projecting, but it does seem like quite a difference in magnitude.

Yeah, Amanda. This is Bryan. I'll take the question. When I look at the guidance and think about the midpoint of the guidance range and back out the $50 million that we talk about with respect to Assurex, I'm looking at about a 7% down year over year for the base Myriad business. That's consistent with our hereditary cancer when we look at it for the current quarter relative to the prior-year quarter. Some of the other movers that are taking place in there, as I mentioned, pharma and clinical services, that business was about $47 million, $48 million in the current year, which includes the clinic as well as RBM. We would expect that to return to a more normal rate next year. And then, you have the ups, the growth in Prolaris year over year as well as Vectra are sort of the moving pieces. So I'm happy to spend more time talking about it, but I'd say the primary driver is that change in hereditary cancer since that's the predominant share of our revenue. Mark C. Capone - President, Chief Executive Officer & Director: The other thing I might add Amanda, your question was, is there something else here, some contract that we lost or something like that. And no, none of that is really contemplated in this guidance. To Bryan's point, as we looked at year over year trend in the fourth quarter, we think it was prudent to guide that we'd see that in this upcoming fiscal year as well. And so it was really based more on current trend analysis, because as we said, we obviously saw, we had expected some slight increase in hereditary cancer sequentially Q3 to Q4. That did not materialize and so we think it's just prudent to reflect for…

And our next question comes from the line of Bill Quirk with Piper Jaffray. Your line is open. Please go ahead. William R. Quirk - Piper Jaffray & Co.: Great. Thanks. Good afternoon everyone. So I guess first question, Mark, I was hoping you can kind of elaborate a little bit more on Amanda's. I think in your prepared comments, you made some references to weakness in the oncology side of hereditary cancer. And obviously in response to Amanda's question, you talked a little bit about some, I guess, territory exposure on the genetic side. And so I guess the question is, you've obviously done just a terrific job over the past several years hanging on to oncology share, in particular. And so I guess, if we could just drill down on that market subsegment, I guess what changed there? Was that also sales force turnover? Thanks. Mark C. Capone - President, Chief Executive Officer & Director: Yeah. Thanks, Bill. Really, it was related to that, to the sales force turnover. So the genetics customers are sprinkled throughout virtually every account executive's territory. And as you might imagine, those are a generally high frequency ordering customers. And so when you have an empty territory, it's going to certainly impact that genetics portion of that business probably more so, because most our competitors are really spending the majority of their time in the genetics segment. So I think that's the segment that's probably most exposed to a lack of us having sufficient share of voice in those offices. So I think it really related to that same phenomenon. And so most of this incremental loss that we can detect really was still concentrated in the genetics segment and largely associated with sales territory turnover. William R. Quirk - Piper Jaffray &…

Yeah, we didn't break out the US versus international component. That number I gave was total company

Our next question comes from the line of Jack Meehan with Barclays. Please go ahead.

Hi. Good afternoon, guys. I wanted to ask again about the assumptions going into the hereditary cancer business for 2017, specifically around the market share. Just, could you elaborate? I understand some of it's related to sales force turnover. Could you just maybe quantify how that level is different relative to prior years? And were any of the, maybe just the losses that you've ceded, did they pair up with any geographies where you've had any notable payer changes in the last six months? Mark C. Capone - President, Chief Executive Officer & Director: Yeah. Thanks Jack. Yeah, the turnover numbers, they were high enough that obviously they caught our attention. So you're looking at turnover that's probably close to double what we would typically see and the losses that we experience are related in fact to those territories that are empty. And so, we saw a pretty good correlation there and it was more pronounced certainly than the turnover levels that we would typically see for any of our sales organizations.

Okay. Any maybe could you just talk about, as you reflect on the business, just is there any sort of urgency to either fill the seats with new hires, or does it change the way that you think about managing the business? Mark C. Capone - President, Chief Executive Officer & Director: Well, I think what it underscores is something we've always known, is that the impact from our sales team is very pronounced. This is a very, very high touch business, and we know that it's imperative that you have very high talented sales people. This is not something you can just put on the Internet and expect somebody to understand how to do this appropriately. That's not a business model that works in this industry. It really requires a very high touch. So obviously, there is a significant urgency to address not the root cause, certainly fill the territories and address the root cause. I think one of the things – and I was at our national sales meeting just a few weeks ago and had a chance to interact with our oncology team, and there is a palpable level of excitement for sales people. They like to see new breakthrough technologies, and we're entering into an era of new product launches in oncology that we have never experienced as a company. Our lung cancer product is on the verge of getting reimbursement, clearly a best-in-class product for a cancer that has no good way to determine whether or not chemotherapy should be provided. We are preparing for the launch of EndoPredict, which is the best-in-class second generation product. It was interesting as you talk to sales people, many of them remarked on the fact that never in their career have they had such a positive journal article…

Yeah. Thanks, Mark. I can appreciate that. And if I can squeeze in one more, I think I caught $50 million for Assurex. What are you assuming for volume growth? And screen is lighter than what we were thinking about. Could you just maybe put that into context for us? Thank you. Mark C. Capone - President, Chief Executive Officer & Director: Yeah. Thanks, Jack. Obviously, the one data point we gave out for last year was $60 million in revenue for fiscal year, our fiscal year 2016. I think as we contemplate the three quarters in which we will have owned Assurex, I think one of the things that we're taking into consideration is that inevitably when you do one of these integrations, there could be some disruption in the sales force. And so we wanted to make sure that as we contemplated guidance that we accounted for that. But obviously, this is a very rapidly growing test. You can see that in the charts we've provided, probably the one of the most rapidly growing in the history of advanced diagnostics. So we remain very excited about its growth potential. But I think as we provide guidance for the year, we again thought it was prudent to reflect on the fact that we're just going to be acquiring this asset. And we need to contemplate that there could be some level of disruption.

And our next question comes from the line of Tim Evans with Wells Fargo Securities. Your line is open. Please go ahead.

Thanks. Mark, what are you assuming for market growth in 2017 in hereditary cancer? Mark C. Capone - President, Chief Executive Officer & Director: Yeah. Very difficult to determine precisely what's happening to market growth. As you know, Tim, we don't have other laboratories that are disclosing volumes. And so it's very difficult to know precisely what's going on in the market. I think for us, the volume determinant was really reflecting on the Q4 year over year numbers. The volume component of course being part share, part market growth. And that's the perspective that we looked at this as we provided guidance is, what are we seeing in totality for volume, because teasing that apart into share and growth is increasingly difficult with nobody actually disclosing data.

Well, what I'm trying to get at is in your longer-term guidance, you had assumed market growth of 7% to 15%. Are you embedding that kind of market growth in your 2017 guidance? Mark C. Capone - President, Chief Executive Officer & Director: Yeah, I think we continue to believe that this market, because of its low penetration, that those types of growth numbers, 7% to 15%, are very appropriate for the long-term growth in this market. Every indication would be that with the expanded indications that in fact that opportunity could even be greater. And so yes, we continue to believe that those are the long-term potentials that we've seen, and this business has historically grown at 10%. I think it's difficult to tease that out specifically for, let's say, a fiscal 2017. But I think as we think strategically, as we look at the long-term plan, we continue to believe those types of market growth numbers are realistic.

Okay. So if your guidance is down 7% and you're assuming the market grows somewhere in that midpoint range, is it fair to say that share plus price together would probably be somewhere in the 10% to 15% range of erosion in share and price together? Mark C. Capone - President, Chief Executive Officer & Director: Yeah, I'm not sure I'm prepared to comment on each component. I think the best way to think of it is the way we laid it out, is in fourth quarter we saw 7% year over year. That formed the basis of our thinking. And of course pricing, we've been able to take into consideration because the fourth quarter had the pricing in it associated with our long-term contracts. So I think that's the way we've really thought about guidance.

Okay. I need to squeeze in one more. If your pharma and clinical revenue is going down, that is a little counterintuitive to me given the number of initiatives that you have going on with CDx. Can you just explain why that revenue would be going down? Mark C. Capone - President, Chief Executive Officer & Director: Yeah. Thanks, Tim. Sorry, that's more of a classification issue. So the pharma and clinical services does not include our companion diagnostic numbers. Those numbers are in the molecular diagnostic portions of the business, so pharma and clinical services is specifically the clinic and our rules-based medicine business. Those are the two numbers that fall into that line item. And the reason we'd expect those to decline, Myriad RBM is very much a project driven organization and we saw some very large pharmaceutical projects in fiscal 2016 that we're not necessarily planning on seeing in fiscal 2017. And so that's I think a large reason we'd expect that to potentially see decline in that business back to more historical levels.

Okay.

And our last question comes from the line of Isaac Ro with Goldman Sachs. Your line is open. Please go ahead. Isaac Ro - Goldman Sachs & Co.: Good afternoon, guys. Thank you. Just another question on the assumptions behind your 2017 guidance. If we assume that about two thirds of your business in hereditary cancer is under contract, as you mentioned, and if we assume the volume with those payers is more or less flat, I'm just trying to square up what you're assuming for price and volume declines in the remaining 35%. Because it just seems like if I back into the numbers, you guys did about $630 million in hereditary cancer in 2016. If we take out that 35% that's left over, that isn't under contract yet, the assumption to get your 2017 number is I think something like a 20% decline. So just trying to make sure I understand the assumptions you're making for that remaining 35%.

Yes, Isaac, this is Bryan. I'll give it a shot. I think it's consistent with the way that Mark had laid it out, which is that when we look at Q4, which is really a combination of price, volume, market growth, et cetera, we really use that as a jumping off point for our guidance for the following year. So we believe it incorporates market growth as well as share loss and price. So we're not going to get into breaking out each of the individual components, but the net of all that is that we would expect our 2017 number to be consistent from a trend perspective with our Q4 number. Isaac Ro - Goldman Sachs & Co.: Okay. And then just maybe a follow-up on capital allocation. Obviously your stock's been under a little bit of pressure this year. It will probably be under pressure again tomorrow and you've obviously deployed most of your capital to M&A, which you've explained in a great amount of detail. I'm just curious, at what point do you guys consider being a little more aggressive with the resources you have to help your shareholders out here during this period of transition? If we accept that your growth trajectory is still in that 7% to 15% range, clearly 2017 does not set up to be consistent with that path. So is there a way you can kind of create some value for your shareholders throughout that period?

Yes sure. From a capital allocation perspective, I think one of the items that we laid out earlier was that we expect to finance a large portion of the initial payment for Assurex. So we ended the quarter with roughly $240 million of cash. We'll always be opportunistic and evaluate capital allocation in terms of where we think, if we think our stock is severely undervalued and would act accordingly. So I think while our stated purpose for free cash flow will be to pay down debt, that doesn't preclude us from being opportunistic when it comes to share repurchase. Isaac Ro - Goldman Sachs & Co.: Yeah. Thank you.

And Mr. Gleason, I'll turn the presentation back to you. Please continue with your presentation or closing remarks.

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

And ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation and ask that you please disconnect your lines.