Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics Second Quarter 2017 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 is being recorded Tuesday, February 7, 2017. I would now like to turn the conference over to Scott Gleason, VP of Investor Relations at Myriad Genetics. Please go ahead, sir.

Thanks, Herman. Good afternoon, and welcome to the Myriad Genetics fiscal second quarter earnings call. My name is Scott Gleason. 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 from 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 we'll be 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 documents that 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'm now pleased to turn the call to Mark.

Thanks, Scott. I would like to start today's call by providing the key highlights for the quarter, after which Bryan will provide a detailed overview of our financial results and guidance, and I will finish by providing additional details pertaining to the ongoing execution of our business strategy. Overall, the results for the second quarter exceeded our expectations reaching their highest level in the last three years, driven by a return to sequential growth in hereditary cancer revenue, and strong results from GeneSight. In fact, we exceeded expectations on both the top and bottom line, with revenue reporting at a $196.5 million and adjusted earnings per share of $0.26. During the quarter we saw significant progress towards our three strategic imperatives that include; continued leadership in an expanding hereditary cancer market, diversifying our revenue with new products, and growing kit products in major international geographies. Importantly, hereditary cancer revenue grew 3% sequentially, with volume trends continuing to improve throughout the quarter. Of particular note is that the oncology market also experienced sequential volume growth, reversing a trend from the past 18 months. We continue to have productive dialogue with payers, and similar to Blue Cross Blue Shield of California, we have positively resolved our negotiations with Highmark Blue Cross Blue Shield, and signed a contract for hereditary cancer testing. Our product diversification strategy continued to show encouraging signs of progress. This quarter non-hereditary cancer products and services comprised 67% of total volume and 27% of total revenue. Our Assurex Health acquisition continued to exceed our expectations with total volume up 61% year-over-year, and revenue growing 47% year-over-year. Importantly, Assurex anticipates completing enrollment in its large prospective clinical utility study well ahead of schedule, and we expect to see the data from the 1,200-patient study by the end of calendar 2017.…

Thanks, Mark. I'm pleased to provide an overview of our financial results for the fiscal second quarter of 2017, followed by additional detail on our updated fiscal year 2017 financial guidance. Second quarter total revenues were $196.5 million compared to $193.3 million in the same period in the prior year, an increase of 2%. We were pleased to return to growth on a year-over-year basis this quarter, and deliver our highest revenue quarter in the last three years. Hereditary cancer revenue in the quarter was $144 million and grew 3% sequentially. On a year-over-year basis, hereditary cancer revenue was down 13%, and this was driven by declines in both volume and average selling price per test with volume declines responsible for the majority of the decrease. GeneSight revenue in the quarter exceeded our expectations coming in a $21.7 million and grew 47% year-over-year. GeneSight volume for the second quarter was 57,000 tests, which was up 61% year-over-year. This quarter, GeneSight exceeded hereditary cancer to become our highest volume test. Vectra DA volume in the quarter was approximately 37,000 tests, which represented a 3% decline year-over-year. Vectra DA revenue in the first quarter was $10.7 million, which was down 5% year-over-year. This quarter Vectra DA volume was detrimentally impacted by two factors; first, some sales force realignment related to the addition of new territories and the promotions of four key personnel to broadening implementation of practice integration program; and second, the negative impact of the AMPLE study. Now, that we have stabilized the sales team, and have the opportunity to provide the correct analysis of the AMPLE data to our customers, we expect to see Vectra volumes and revenue grow on a sequential basis in the fiscal third quarter. This is evidenced by the fact that Vectra DA volumes in December…

Thanks, Bryan. I'm happy to provide some additional details about the execution of our business strategy. Our hereditary cancer business demonstrated sequential growth in both our preventive care and our oncology markets. The oncology growth was particularly noteworthy since we had not seen sequential growth in that segment for 18 months. This was attributed to three primary factors. First, we signed preferred provider agreements with organizations that represent over 70% of community oncologists. This agreement emerged after extensive technical assessments by these organizations, and underscores our best-in-class quality and research commitment. As a result, in the second quarter, we experienced double-digit sequential growth among oncologists in these physician networks. Second, from a sales force perspective, we saw increased productivity within our hereditary cancer sales teams, with the highest field territory count in our oncology team in the past year. Finally, we saw positive order trends from our disease-specific panels that we launched in the fall for genetic specialists who wish to tailor their gene selection. This was evidenced by the fact that monthly test volume from genetic specialists was up 24% from the start of the year. On a managed care front, similar to our positive resolution with Blue Cross Blue Shield of California, we signed an agreement with Highmark Blue Shield to remain as an in-network provider. We continue to demonstrate that myRisk provides substantial additional value relative to the lower quality hereditary cancer tests and approach contracting with that perspective. In the few cases where we have not reached agreement, we continue as an out-of-network provider, billing less charges, and retaining more than 80% of the volume. It is important to note that as an out-of-network provider, insurance payments are typically 60% to 80% of bill charges. Regardless of our network status, physicians and patients continue to demand…

Thanks, Mark. As a reminder, during today's call, we use 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 for the Q&A session. In order to ensure broad participation in today's Q&A session, we are asking participants to please ask only one question and one follow up. Operator, we are now ready for the Q&A portion of the call.

Thank you, sir. Our first question comes from the line of Amanda Murphy from William Blair. Please go ahead. Amanda L. Murphy - William Blair & Co. LLC: Hi. Good afternoon. Mark, a question for you just on the sales force, just I guess thinking about the changes in the business (38:20) shifting from hereditary cancer to some of the other business lines that are growing, how are you thinking about – or I guess, maybe just first, can you maybe speak to the sentiment of the sales force? Just I know in some cases there is not the ability to cross sell necessarily and (38:40), so maybe just starting with that. And then just thinking about incentivizing going forward, how are you guys thinking about providing incentives particularly given that, again, there's not necessarily always cross-selling opportunities?

Yeah. Thanks, Amanda. So I've assumed probably you're speaking specifically towards the oncology team. As I mentioned, they are very energized at this point. I think there is a number of reasons why. First obviously, results in the second quarter were excellent, we are very pleased to see an 18-month trend reverse in the second quarter. I think, it's a result of some excellent strategic work and tactical work on the part of our entire oncology business unit. And of course that has everybody excited to see that kind of results from the efforts that were put in by the entire team. In addition to that, they've now got a couple of exceptional products to launch. EndoPredict is of course coming, and our companion diagnostic portfolio, they feel very excited about BRACAnalysis CDx, the potential for expanding indications for BRACAnalysis CDx, and myChoice HRD and the data that's going to come in the next 12 months. So that type of world-class portfolio of products is very unique for a salesperson to have three world-class products at one time. And so they're very excited about that. I think, as evidence of that, we've got the sales force a full – the full territory counts are higher than they've been in at least 12 months. And so the team, at this point, I think is quite excited. Each of our sales teams, to your point, they're going to have opportunities for multiple products. We just talked about oncology with three products. With urology, now they'll be launching a second product, which is exciting as well, because the numbers of men with Gleason Score 7 or above are 100,000 men a year that have that, and if they have family histories, they're eligible for testing. So our urology team is excited about now…

Yeah. I think, one of the things that we had not seen actually was a sequential increase in oncology, if you actually look back over the last 18 months. So I think, that actually was unique that we did in fact see this sequential increase. And the other reason that's the case is that generally the sequential increase we do see from Q1 to Q2 is primarily associated with patients that are exhausting cafeteria plans and things like that. That's really not as applicable in the oncology market, because unfortunately many of these patients have exhausted their obligations for out-of-pocket cost long before you approach our second quarter. And so I think, that was actually out of the norm for what we would have typically seen in oncology. In preventive care, we have historically seen an increase sequentially, the types of increases we see really depend on each year, and frankly sometimes we see unique things like celebrity publicity that hit in our second quarter. So ranges of anywhere from 0% to 6% types of sequential increases are things we might have seen in the past. So I think the sequential increase we saw in preventive care was pretty typical for us. Amanda L. Murphy - William Blair & Co. LLC: Okay. Thanks very much.

Thank you, Amada.

Our next question comes from the line of Sung Ji Nam from Avondale Partners. Please go ahead.

Hi. Thanks for taking the question. Mark, I was wondering for your companion diagnostic program other than niraparib, how many of the eight additional pivotal studies that are expected later this year involves myChoice HRD? And related to that, and based on your experiences with Lynparza, are you seeing the cannibalization of the BRACAnalysis CDx from other non-FDA approved tests? And then also given there is another FDA-approved test out there for a PARP inhibitor, how do you see that potentially impacting your position for CDx? Thanks.

All right. Thanks, Sung Ji. I'll see if I can remember all of those. So as you look out, we have not publicly disclosed the exact nature of each of our companion diagnostic products with our collaborators on their request. And so I can't give you definitive details unless the pharmaceutical company has made that public. And so I'd refer you to some of those. We're collaborating with all of the PARP inhibitors with the exception of one Clovis. And so we have active programs with all of them, and some of them have announced their plans and strategies with myChoice HRD, some have not. And I've also mentioned in fact that some are utilizing myChoice HRD Plus, which includes over 100 additional genes measured in tumor. And again, we haven't necessarily disclosed all of those relationships with those pharmaceutical partners. But certainly over the next year, we're going to see a number of other read-outs with myChoice HRD as a companion diagnostic. I think your second question was cannibalization we might see from non-FDA tests for patients being considered for PARP inhibitors. It's difficult to say, obviously companies aren't disclosing their results, and certainly don't disclose those by patients with indications. The other reason that it's complicated or difficult to see is because at least today all of the patients that are approved for PARP inhibitors, ovarian cancer patients, are patients that would otherwise qualify for a germline hereditary cancer test. And so in general, when we started down this path, we had never expected BRACAnalysis CDx for ovarian cancer to necessarily add to the market as a whole, because those patients were already indicated for hereditary cancer testing. There probably are some instances where physicians are using a non-FDA approved test, but of course those companies, there the company should not be promoting BRACAnalysis for use as a companion for PARP inhibitor if they have not gotten that approved by the FDA, but they can promote it for use as an hereditary cancer test. And lastly, there is of course another FDA approved test for PARP inhibitors. It's essentially a test to look at the tumor BRCA status. One of the things that's important to note is that myChoice HRD submission that we have in front of the FDA has two components to it. It's a tumor BRCA result, as well as the HRD score. We think our test will be the best test at identifying patients that have tumor BRCA mutations, given our extensive experience, our capability of classifying variants, and those variant classification programs that are previously been reviewed by the FDA. And so we will be able to provide physicians with a tumor BRCA result once the myChoice HRD product is approved. So hopefully that got all your questions, Sung Ji.

Thank you so much.

Our next question comes from the line of Bill Quirk from Piper Jaffray. Please go ahead. William R. Quirk - Piper Jaffray & Co.: Great. Thanks. Good afternoon, everyone. First question, Mark, just wanted to ask about the CPT coding meeting that's coming up here later on this week. There's obviously some language about adjusting some codes and such, and would just be curious to hear your take on that. I think certainly there are some that think this might be a bit of a kind of headline risk relative to the hereditary cancer business. Thanks.

Yeah, thanks, Bill. Yeah, there is obviously a CPT coding committee coming up, a couple of different codes are under discussion. I think the one that probably has got the most discussion is a code 81432, which is the sequencing code that some companies are using. For us, this is really not much of an event. The codes that we use are all things that we negotiate and include in all of our private payer contracts, and have discussions with Medicare as well. 81432 is not a code we use, it's not in our contract, it's not one that we would plan to use. Remember, these contracts are three-year contracts. And all the coding is already contained in those contracts, and 81432 is not a part of any of those contracts. So for us, we don't use it, we're not planning to use it. So I think, the discussions this week are probably not really salient for us as a company. One other thing I would note, that four companies that do use that, they also build its corresponding ductal code 81433. And for those who didn't see that, recently Medicare modified the pricing for that combination of both the sequencing and the ductal code now is being reimbursed at about $1,550. So that's the price, if you will, for those two codes combined. But again, this is not one that we use or have incorporated into any contracts. William R. Quirk - Piper Jaffray & Co.: Got it. And I appreciate the color. Thanks, Mark, and we did see that additional coding change. Just as a follow up, just thinking a little bit about EndoPredict, obviously it's continuing to perform pretty well outside the U.S. I'm curious about your comments still around Germany and expansion reimbursement there. Can you elaborate a little bit, there obviously was a document that came out, not that long ago, talking about a lot of their current tests and then chemotherapy benefit tests. And quite candidly, I think, there were some expectations of a coverage expansion. If they were certainly they weren't included in at least that document. So could you elaborate on that? Thanks.

Yeah. Thanks, Bill. You're referring to there is an organization that assesses new technologies in Germany, much like NICE for those who are familiar with that in the UK that assesses different technologies in whether or not their view is whether they should be reimbursed. And what came out of that, is that their recommendation was that none of the prognostic tests be reimbursed. Now, that being said, the GBA, which is the organization that actually makes the coverage decisions, is not obligated to follow that, and in fact in many cases has chosen in the past not to follow that. So there has been a decision that in fact it would be appropriate for prognostic testing, and I think the groundswell supported by oncologists throughout Germany is very broad for reimbursing for these prognostic tests. And the GBA has said it's appropriate for cases where those tests are being billed by an ASV, which is a specialized breast cancer center in Germany. Most patients in Germany, I think 75%, are seen by these specialized ASVs. And so for those institutions, they have to establish themselves as an ASV for this testing, and when they do so, they should be reimbursed for EndoPredict testing. And so that's a little more color on my commentary that these particular cancer centers are in the process of filing and getting the paperwork done to be designated as an ASV, and then will be able to secure reimbursement. So we're expecting that to begin to happen in the latter half of this fiscal year. I know it's complicated. Hopefully that makes sense. William R. Quirk - Piper Jaffray & Co.: It does. Thank you.

Our next question comes from the line of Jack Meehan from Barclays. Please proceed with your question.

Hi. Thanks. Good afternoon, guys. I wanted to follow up and ask about EndoPredict here in the U.S., just a little bit more visibility on the launch timeline, what you are waiting for for that to begin, and then your thoughts on the Medicare dossier process for that.

Yeah. Thanks, Jack. As we noted in our commentary that we continue to expect launch of EndoPredict in the United States by the end of this fiscal year. Obviously, we're in February, so that doesn't give us many months left. So you'll see it in the coming months here. We haven't purposely provided a lot of additional detail as to the nature of that. Obviously, this is a competitive market and we think it wise to not necessarily provide additional details, but we will be selling it through our oncology sales team and to customers that they know quite well. And so we're excited to be able to provide that with some really nice head-to-head data for our customers to compare some of the alternatives that are in the market. From a Medicare perspective, we have submitted that. Of course there is no statutory requirement as to how long it might take Medicare to review that dossier and decide whether to post a draft LCD. That would be the next step that we would expect to see. If in fact they're favorable towards that dossier, we would see a draft LCD and that would go through the public comment period that it has historically gone through. So there will be a 90-day process, if you will, at least 90 days after in fact the draft LCD is posted before that were to become finalized. I would also note that Medicare had actually posted a draft LCD for EndoPredict previously, and it had been incorporated with some other tests into a singular draft LCD. That was subsequently withdrawn because of the nature, the fact that there were multiple tests that were contained on that LCD, but I do think at least reflects on the fact that they were favorably inclined to a draft LCD in the past six months. So we're hopeful that's an indication, and we'll obviously pursue this aggressively.

Great. That's helpful. And then, Bryan, one on the income statement. I was just wondering, is there anything notable in the bad debt line this quarter? I'm not sure if it's just the new products or out-of-network revenue or some abnormal claims coming through, but just any thoughts on that would be great. Thanks.

Yeah. Thanks, Jack. Yes. I would say nothing to highlight. We look at that on a multiyear basis and I think when you look at it historically it's fluctuated up and down over time. So I don't think there is really anything that I would highlight in the current quarter.

Thank you. Our next question comes from the line of Tim Evans from Wells Fargo. Please go ahead.

Thanks. Earlier in the year after you bought Assurex, I think you were planning on revenue of about $50 million for the year, and it looks like it could be closer to $70 million if we're taking this quarter's numbers as kind of a run rate. Can you talk about what's created that upside for you? And then, given that your guidance is unchanged at the midpoint, is the offset there the Anthem revenue? Thanks.

Yeah. Let me talk about the first and then I'll have Bryan elaborate on some of the guidance numbers. I think one of the things we noted, Tim, when we acquired them is, any time you do an acquisition, obviously there needs to be integration activities that can sometimes cause disruption, and we noted when we did the acquisition that our guidance was predicated on an expectation that there might be some disruption as we pursued integration activities. I think the integration teams from both companies have been outstanding. And I think we clearly have not seen that disruption, and in fact, I don't think the Assurex team has missed a beat. And so I think that's part of what you're seeing in this, is that a team that was growing the business extremely well, and a trend that's just continued subsequent to the acquisition and during the integration. Bryan, you want to talk about guidance?

Yeah. And Tim, I would say, relative to the guidance, I think you hit on the right point, which is that when you look at the $10 million that we talked about in the back half of the year related to Anthem, I think that's really offset by the upside that we've seen in Assurex relative to where we were at the start of the year. So, I think that would be the primary thing I would point to.

Okay. And just in broad brush strokes, how would you characterize your confidence in having the Vectra non-coverage decision reversed?

Yeah. Thanks, Tim. We're very confident in the AMPLE analysis that we've done, and we're actually happy to provide it to any of you that may be interested in the actual underlying data that led to the chart that we showed in the prepared slides. I think if you look at that slide that shows the AMPLE analysis correctly done compared to the other three studies, you can see that – which frankly isn't always the case in any industry in healthcare – you can see the data is very consistent with what we've seen in every other published study, that shows Vectra does in fact predict radiographic progression. We know what the flaw was in the AMPLE analysis. It's very easy to see it, and we can show you a table where it's quite clear. And so we feel very confident that AMPLE, analyzed appropriately, is very consistent with what we've seen in every other study. In addition to that, we think there's been ample publications, pardon the pun, since Medicare made its original decision. 26 additional publications in three years is pretty remarkable, and many of those were clinical utility studies that shows that, Vectra can help decide what to do with methotrexate incomplete responders. It can help decision-making around tapering. Also some data that shows compared to the traditional measures of disease activity, for example, DAS28-CRP, if you were to look at a study like the Lyden (59:35) study, what you can see is that, in instances with DAS28-CRP is actually showing low levels of disease activity, we actually see about 25% of the time Vectra has picked up underlying disease activity that was not detected, and in fact, those patients that did not have a Vectra score ended up with a significant incidence of radiographic progression. So again, demonstrating the utility for 25% of the patients, you would have actually missed that, the new reversible bone damage, because you didn't have the benefit of Vectra that could look underneath the surface at some of the disease activity with a more sensitive measure. So I think, when you look at the totality of evidence, we're very confident in what Vectra can do, and the data that we've been able to demonstrate. It's also been very encouraging for us to see the groundswell support for many patients, many doctors, this has become a very integral part of their practice. Some patients view this as like their HbA1c for diabetes whereby they rely on that data to ultimately give them hope to keep them on track with all of their aspects with healthcare. And so we've certainly seen hundreds of people that have expressed interest in ensuring that this continues to be accessible to patients. You never know the outcomes of these, but I think we feel very confident in the data and the support that we have going into the public comment period.

Okay. Thank you.

Our last question comes from the line of Tycho Peterson from JPMorgan. Please go ahead.

Hey, thanks. Mark, on that last point on Vectra DA, when will you have the payer demonstration project complete, does that happen during the 45-day public comment period? And what gives you confidence that Vectra returns to growth in the back half of the year, is that just a function of the sales force turnover kind of stabilizing, and the AMPLE study no longer having an impact?

Thanks, Tycho. That demonstration project that we mentioned will not complete during this public comment period. I think that study will be a little longer study. And so that's going to play out over the coming months. So it's not going to add to the 36 publications that we already have during that timeframe. From a growth perspective, I think one of the things that was important for us to look at is, what did the trends look like after we were able to discuss the data from AMPLE, and as we mentioned, we did in fact see when you saw December and January data compared to October-November data, you actually saw a nice uptick in demand, and that was demonstrative of the impact that our sales teams were having. So I think it's the fact that the sales force realignment has been completed, it's the fact that we've got really good messaging out there, and a talented team that's out there being able to give physicians continued confidence, and it's looking at the trends that we've seen in the last couple of months. I think those things together have us confident that we're going to return to sequential growth in the second half.

And then one follow up, can you comment on your view on timelines for coverage decisions on GeneSight? You talked about the demonstration project in United, Humana and Anthem. When could we start to get some coverage decisions?

Yeah. Thanks, Tycho. As you know, having covering the industry for a while, predicting these things is difficult. What I can say is that the health economic data that we discussed is recent data, and the fact that we've been able to generate that data in United Healthcare's database, as well as Humana and Anthem's databases, and those analyses are either done at this point are very close to that. That speaks loudly to the insurance carriers because these are their own members, and we can demonstrate cost savings in their own plans. And so we think that was very impactful on that data is either available now or will be available quite shortly. And so obviously you could imagine we're aggressively having those discussions about not only the utility of the data but the health economic impact in their own members, and that will continue to be a high priority for us.

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.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.