Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics Third Quarter 2018 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, May 8, 2018. I would now like to turn the conference over to Scott Gleason, Vice President, Investor Relations. Please go ahead.

Thanks, Gwenn. Good morning and welcome to the Myriad Genetics fiscal third quarter 2018 earnings call. My name is Scott Gleason, and I am the Vice President 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've not had a chance to review the earnings release, it can be found in the Investor Relations section of our website at myriad.com. Presenting from Myriad today will be Mark Capone, President and Chief Executive Officer; Bryan Riggsbee, Chief Financial Officer and Bryan Dechairo, our Executive Vice President of Clinical Development. 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's a slide presentation pertaining to today's earnings call on the Investors section of our website and which will be filed following the call on 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 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 the actual results to differ materially from those contained in our projections and forward-looking statements. With that, I'm pleased to turn the call over to Mark.

Thanks, Scott. I would like to start today's call by providing key business and financial highlights from the third quarter of fiscal 2018, after which Bryan Riggsbee will provide an overview of our financial results and guidance and we will finish with the presentation of the GeneSight randomized controlled trial data released yesterday at the American Psychiatric Association meeting by Dr. Bryan Dechairo, Myriad's Executive Vice President of Clinical Development. In the third quarter, we once again exceeded expectations with revenues of $193.5 million and adjusted earnings per share of $0.31. We are pleased with this strong performance given challenging weather conditions across the United States in the third quarter which we believe negatively impacted test volumes by approximately 1% to 2%. Based upon the solid quarterly results and strong volume trends heading into the fourth quarter, we are once again raising our financial outlook for this fiscal year and are now guiding to revenues of $771 million to $773 million compared to our previous guidance range of $760 million and $777 million (sic) [$770 million] and adjusted earnings per share of $1.19 to $1.21 compared to our previous range of $1.11 to $1.16. During the quarter, we continued to make significant progress on our five critical success factors to build upon a solid hereditary cancer foundation, grow new product volume, expand reimbursement for our new products, increase international RNA kit revenue and improve profitability with the Elevate 2020 program. From a hereditary cancer perspective, we outperformed our expectations in the third quarter, given typical seasonality from co-pay and deductible resets and the challenging winter weather that persisted for the majority of the quarter. Volume grew on a year-over-year basis for the fifth straight quarter and once again exceeded our 3% growth target. Pricing in the third quarter was stable…

Thanks, Mark. I would like to start by providing a more in-depth overview of our fiscal third quarter financial results. Third quarter total revenues of $193.5 million compared to $196.9 million in the same period in the prior year, a decline of 2% year-over-year, with the year-over-year pricing decline in hereditary cancer being mostly offset by new product revenue growth and hereditary cancer volume growth. Hereditary cancer revenue in the quarter was $123.3 million, which exceeded our expectations given typical third quarter seasonality and challenging weather conditions that we believe negatively impacted our test volumes by approximately 1% to 2%. In the absence of this weather impact, we believe our overall revenue would have been relatively flat on a sequential basis given stable sequential pricing. On a year-over-year basis, we grew volumes for the fifth straight quarter, so the year-over-year decline in revenue was entirely attributable to pricing. GeneSight revenue in the quarter was $30.4 million, and grew 27% year-over-year. Volume in the quarter achieved a new record and was up sequentially despite the weather headwinds, with modestly lower revenue attributable to less favorable payer mix. We were very pleased with the strong volume trends we saw in the quarter for GeneSight, given typical third quarter seasonality and the impact of severe winter weather in the quarter. This quarter, we once again set a record with an additional 2,300 new ordering physicians and over 11,000 total ordering doctors. Total ordering physicians in the quarter increased 37% year-over-year, which is a strong leading indicator for future demand trend and reflective of the positive physician response we have received in a randomized control trial top-line data. Vectra DA revenue in the third quarter was $15 million and grew 34% year-over-year. Much of the year-over-year increase was attributable to the new Vectra DA…

Thanks, Bryan. I'm excited to provide the broad results from the GeneSight randomized controlled trial, beginning with some background on the clinical need for the product. As many of you already know, major depressive disorder is one of the most common medical conditions in the United States and currently impacts greater than one in 20 Americans. Over a lifetime, almost one in five Americans will develop severe depression leading to greater than $100 billion in total economic cost. With antidepressants being the second most prescribed class of drugs in the United States following lipid regulators. The indirect medical cost, depression leads to significant ancillary cost for related medical disorders such as back pain, sleep problems and other physical disabilities as well as significant societal costs in the form of decreased workplace productivity and increased disability. These total costs are increasing dramatically, rising 28% between 2005 and 2010. Studies have shown that that total cost for treating a depressed patient exceeds $20,000 per year. From a physician perspective, the goal of treatment for depression is to achieve remission which is a healthy state free of depressive symptoms. The American Psychiatric Association Depression Treatment Guidelines directly states and I quote, "Treatment in the acute phase should be aimed at inducing remission of the major depressive episode." There is strong documented clinical evidence that small changes in symptoms do not necessarily correlate with improved long-term outcomes. Consequently, physicians are focused on achieving remission. Additionally, in our discussions with top national payers, we have received feedback on the importance of remission and response due to the fact that they need to report this data and their health effectiveness data and information set, HEDIS, to the National Committee for Quality Assurance, or NCQA. The NCQA quality assessment measures are used by more than 90% of…

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 on the Investor Relations section of our website. Now, we're ready to begin the Q&A session. Gwenn, we're now ready for the Q&A portion of the call.

Thank you. The first question comes from the line of Doug Schenkel with Cowen. Please go ahead. Doug Schenkel - Cowen & Co. LLC: Good morning. Thank you for taking my questions. First on GeneSight, I'm just curious based on the data you're presenting this morning. I know this is maybe jumping ahead a little bit, but how are you thinking about potentially expanding the label or coverage to allow for more direct targeting of the PCP market? And would a move into the PCP market impact the health economic calculations that you shared this morning?

Thanks, Doug. This is Mark. I'll answer that and, Bryan, I'll see if you have anything to add. One of the important things from the primary care perspective is that we wanted to generate a data with specifically primary care practitioners. There were some included in the RCT data that we just announced. There were primary care physicians included in that. Probably even more importantly was the IMPACT study that we mentioned in the script again this morning we provided top-line results on that. That was specifically designed to see how well primary care physicians did with the use of GeneSight relative to psychiatrist. That data was very positive. In fact, it showed that the primary care physicians did even better. Both physicians did well. Primary care physicians did even better. A very large study, that study has been submitted for publication. And we are anticipating that can be published potentially around the end of this fiscal year as well. So we think that's the type of information that if required from payers and specifically Medicare has requested that information, we believe that the magnitude of that study in both scale and quality of the results are sufficient to secure primary care reimbursement. I think from health economic standpoint, I wouldn't expect the differences between psychiatrist and primary care to be any different. I think all the dynamics that drive those health economic savings are fundamentally the same in both of those settings. Bryan, any additional comments from your side?

Yeah. I will just add that in our Medco study that we did with 13,000 patients, we also saw better healthcare savings with primary care physicians versus psychiatrists again, because they utilize the test more congruently, and therefore had higher outcomes. In addition, because they treat patients' comorbidities like cardiovascular and diabetes illness, which is very comorbid with depression, we are able to see even greater savings across the healthcare system. Doug Schenkel - Cowen & Co. LLC: Great. That's very helpful. And then, if I could just ask one more, I guess, unrelated follow-up. You guys indicated that HCT volume growth was stronger than expected. I believe you said at 3%. That said, HCT revenue declined 12% year-over-year. Can you just refresh us on the outlook for year-over-year ASP stabilization? It seems like mathematically ASPs dropped 15% year-over-year, but you did indicate that they moved sideways sequentially. So given the annualization of Anthem and the agreements you entered into in the second half of last year, is next quarter the quarter where we should expect ASP stabilization, and then from there overall HCT revenue growth to resume?

Yeah. Thanks, Doug. As you mentioned, yeah, those were the numbers 12% year-over-year revenue decline. We did indicate volume was exceeding – the volume growth exceeded our 3% target for the year. And that is a reflection of the fact that in our long-term contracts we had taken some price decreases. For us what's important was to look at how this – how ASP looks on a sequential basis. And as we mentioned, ASP in the third quarter was flat with ASP in the second quarter. So we have seen stabilization of pricing. We're anticipating that we'll continue into the fourth quarter that we stabilize that pricing at this point. So from our perspective, when you're looking at growing volumes five quarters in a row of volume growth and we've got stable pricing on a sequential basis, I think for us that provides really strong conviction that the hereditary cancer business is one that we continue to feel very good about as we move into fiscal year 2019. Doug Schenkel - Cowen & Co. LLC: Okay. Thanks, guys. Appreciate it.

Thanks, Doug.

Thank you. The next question comes from the line of Jack Meehan with Barclays. Please go ahead.

Thanks. Good morning. So I had a few questions related to health economics of GeneSight. I'm curious what feedback you've gotten from payers related to that. The workplace productivity is something that you think has been well received? And then, just your appetite related to the price point of the test, whether you'd be willing to accept anything less than $2,000 to drive commercial coverage?

Thanks, Jack. Again, I'll make a few comments and then, Bryan, by all means, you can fill in as well. Obviously, we've had a chance to have discussion with multiple payers at this point. We've secured coverage already, even before the publication which was ahead of schedule. And I think that's a result of both the strong health economic arguments that exist for GeneSight as well as the very strong clinical data that Bryan has gone through. So with the health economic data $3,275 first year savings, this – that's a number that's very impressive to payers. We have discussed the fact that we have a second publication that is consistent with that. That is working its way through the publication process at this point and that's on the Optum data, which again is very strong dataset and a well respected organization. So I think in that regard, both of those numbers are impressive to payers. I think the workplace productivity number is very important to employers and we've had very successful conversations with employers. So this is typically an avenue that we haven't pursued for historical products but one for this – for GeneSight, we think is particularly productive. And there has been strong interest from the employer groups, particularly those that are self-funded, which is about half of the managed life in the country. They're very interested in anything they can do to affect workplace productivity. As a result of that, payers are very interested in anything they can do to appeal to that interest so that they can retain and increase their market share with employers. So that's – although that doesn't necessarily accrued directly to the payer, it does impact their ability to gain share against others. And so they had been very interested because employers consistently are looking for ways to address the large health economic costs associated with workplace productivity. So we found out to be very productive conversation as we've entered into our payers. From the standpoint of price point, we've noted that our target is $2,000 ASP. We have signed contracts with multiple payers. Those have been consistent with that $2,000 price point. We think the value the product offers is consistent with that pricing and that's at this point where we are in our conversation with payers. Bryan, what else would you add?

The only thing I'll add is that depression is a chronic disorder. And we've shown in both the Medco and UHS studies that we save indirect cost over $2,500 per patient, per year. And what we're able to show in our landmark randomized controlled trial is that not only do we have strong results for improving the remission and response but it's durable and further increases over time. So when you look at a payer, these health economics savings are realized in that first year but then continued as an annuity year-over-year for the payer – for the health economic system.

Great. That was all very helpful. And, Mark and Bryan Riggsbee, could you just give an update on the international strategy? So, do you think the clinic sale, what drove the sale? Do you think it could impact your ability to get reimbursement for any of the new products? And then just to make sure we're thinking about it right for 2019, should we pull that revenue stream out starting July 1?

Thanks, Jack. We don't – because of our shift strategically towards a kit based strategy, that's really what ultimately led to the decision that it wasn't necessary to have the clinic. I think we believe there's other better places for us to put capital at this point and so we wanted to deploy that capital to the best uses. That clinic was originally designed to be part of our laboratory developed testing strategy. And again, as we shifted the kit, it's just not necessary. So we don't think it will have any impact on our ability to grow the international business to get reimbursement for our kit based products. And so, again, it was a decision to shift capital. So, Bryan, other comments?

Yes. I would just add relative to the timing I would say, while we said by the end of the first quarter of next fiscal year, we've already started the process of project managing both the sale of the clinic as well as the closure of the lab. And so that's sort of a backstop relative to the clinic piece of that with the closure of the lab coming by the end of the current calendar year. So that's our best estimate at this point.

Thank you. The next question comes from the line of Bill Quirk with Piper Jaffray. Please go ahead. William R. Quirk - Piper Jaffray & Co.: Great. Thanks. Good morning, everybody. Mark, appreciate the details around the GeneSight volumes in the quarter. Can you just help us think about the sequential volume trends, just given the puts and takes between the higher volume, yet the lower revenue?

Yeah. Thanks, Bill. So we were very pleased with the volume in the quarter. Of course, it was impacted like all products from weather conditions in the first quarter. But it was interesting to note in weeks where we had clean weeks without weather impacts, we saw record weeks, we saw record month in March. So the volumes remained very strong. From a sequential standpoint, we did see a shift in mix. And as you know, for the private payer segment, we're not fully reimbursed in that segment. And so, as you see a shift more towards private payer mix, you're going to ultimately at least in the short-term see a reduction in ASP as a result of that. And that's really the phenomenon we saw in the quarter. But the fundamentals of the business and the growth that we're seeing in GeneSight, we're very pleased with, we think the event this week and having full disclosure now on the data is only going to put us in a stronger position to have continual very productive conversations. As Bryan mentioned, we also saw record additions of physician testers in the quarter as well, which, as you're well aware, is the bellwether for continued growth in the future. So, overall, really strong volume shift in mix led to a little lower ASP, but that's to be expected. William R. Quirk - Piper Jaffray & Co.: Okay. And then, just thinking about some of the early payer decisions around GeneSight, I guess, Mark, can you help kind of frame the discussions that are going on in the background? I guess what I'm getting at is have the payers that you're speaking with and/or made a decision already seen the data that you presented yesterday, presumably under a CDA? I'm just trying to figure out kind of how impactful the actual data presentation will be compared to the discussions? And associated with that, eventual publication as well, if they've already had a chance to review everything? Thank you.

Yeah. Thanks, Bill. You're correct. So under NDA, we were able to show the data that we released yesterday to payers in our discussions over the last few months. And so, they have seen what you have now seen. And I think as a result of that is why we've already seen the first coverage decision. There will be additional data that comes out in the publication, as you also know that, and you need to make sure that you've got some other non-public data in publications. And we mentioned that there were other secondary endpoints all of which were analyzed and we haven't presented yet. Those will be in the publication. We're excited to discuss those results with you as well when those are published. And so, to the extent that any of that was important to payers, we've been able to disclose all of that in our discussion with payers. Conversations have gone very well. I think this is exactly what payers were hoping for. It was a very large prospective double-blind study that showed both statistically significant results in eight weeks and showed a durability of response. And so it's exactly what we've been asking to provide, and so they've been very impressed with the data. A couple other anecdotes I can provide. It's been interesting in all of those that symptom improvement is virtually not even a part of the discussion at all. I think the most recent discussion we had with a Medical Officer from a very large payer organization asked in the middle of the presentation to cease with any discussion of symptom improvement and please only discuss remission and response. Of course, we were delighted to do so. And the rationale behind that is that from a HEDIS perspective, what they're asked to…

Yes, I think – Bill, thanks for the question. Yeah, we are not prepared to give guidance for 2019 at this point. So all I would say is, what I said during the remarks, which is, we are active in the process currently. We expect it to close by the end of the first fiscal quarter of our year but it could be sooner as well. We're moving aggressively with that. William R. Quirk - Piper Jaffray & Co.: Thank you.

Thank you. The next question comes from the line of Amanda Murphy with William Blair. Please go ahead. Amanda L. Murphy - William Blair & Co. LLC: Hi. Good morning. So I just have a few more on GeneSight. I guess, first, obviously, you've been at the APA conference the last couple of days, so I'm just curious what – how the docs themselves are reacting to data? And just in terms of the subset data that you presented, is that something that they are focused on in terms of the three different buckets of endpoints? There were some trusts out there that sort of discussions, some reactions from physicians and some were saying, yes, this is great. And some were saying, maybe we prefer to be told this medicine to use, so I was just curious kind of on the ground what the reaction was there?

Yes. Thank you. Amanda. Bryan, you were there for – as were most of us but you are probably closer to some of the psychiatrists, so thoughts from you?

Yes, I think, that – we have a lot of users. We saw that right now, with 11,000 users right now on this quarter for GeneSight. A lot of them were at the meeting. For them, this is just compelling data that supports the decision that they've already made to fully implement GeneSight into their practices. But we also had physicians who were skeptical. They really wanted the same level of evidence that you would have for FDA approval of a medication. And since this trial was larger and longer than FDA approval phase for antidepressant, they found this very impressive and actually have changed their mind on the genetics. The one piece that you asked as well that have been resonating with the physician is the sub-analysis on congruent because overall with our 50% improvement in remission and 30% improvement in response in the total population, that's great clinical utility. But people want to understand where does that utility come from and it comes from the GeneSight test. And so by being able to show them that 21% of patients who were incongruent basically on a genetically inappropriate medication coming in who switched off of it had the largest improvement in symptom improvement, response and remission, and drove the overall benefit in the total population, that proves the clinical validity of the test that it's the genetics that drives it. And I think that type of sub-data has really moved the needle on the physician. And again, a lot of physicians have been waiting for this type of study that has never been conducted in pharmacogenomics. And with the positive result, it's really turning the minds of a lot of individuals. And then finally, I would say that, by working with the National Network of Depression Centers and some of the key investigators who were site investigators on the study also wrote the current treatment guideline. Again, that has moved the needle significantly. One of our doctors at the symposium last night said, they felt like this was the change in tide and the needle has now moved. Amanda L. Murphy - William Blair & Co. LLC: Okay. Bryan, that's – go ahead. Sorry.

Yeah. I would just add, Amanda, your last question about the physicians are asking for even more guidance as to which medication. I think, generally, what we hear is that, it would be very helpful to know even more in the green category which of the medications are most likely to be appropriate and particularly given the fact that many of these patients may be on polypharmacy. And so, I think, from our perspective, we're working on additional tools to help physicians understand even better. But the very fact that they're asking that question, which is, this is great, I know how to look in the green category now. Can you give me more information? That's all encouraging to us, because that really says they already see utility in the test now and they would like to see continued utility which we're working on. So for us, that's a good bellwether for its future use. Amanda L. Murphy - William Blair & Co. LLC: Okay. Yeah. That makes sense. And then, I guess, on a similar vein on the payer side, obviously, it's early with the data on the subset side. And you've talked a lot about how they're more focused on remission and response. But how do you think the subset data will resonate with payers? And, I mean, assuming there's no way you can sort of stratify the population, because obviously you don't know if a patient's incongruent before you do the test. I'm just wondering if there's any argument that it becomes sort of a reflex test in some fashion. But I guess, yeah, that's just a question on that side.

Yeah. I think that data was, as Bryan mentioned, to psychiatrist, to the payers and remember the discussions really having are on the medical side of the payer. As you know, there's two sides. There's the payer organization, there's the medical side and then the contracting side. And the coverage decisions are made by the medical side. So these are all physicians, healthcare providers that are looking at this data. I can tell you and I've said personally in some of those meetings that subset data is extraordinarily impactful to them. When you talk about this type of improvement by switching patients off of red medications, you don't need a lot of words for them to understand immediately how impactful this is. I think I was in one meeting with the payer that was musing, how could you even let them fail one medication knowing this type of information that a patient on a red medication can do so much better. How could we let them even fail one medication? Wouldn't we want to know that information from the very beginning? So that's the type of response we're getting about that. It really, as Bryan suggested, establishes a new standard of care that you've got to know. And to your point, Amanda, there's no way to know whether or not they're on a red or yellow medication in the absence of doing a genetic test. And so I think it's been very well received at this point. Amanda L. Murphy - William Blair & Co. LLC: Got it. Thanks very much.

Thank you. Our last question for today comes from the line of Steve Beuchaw with Morgan Stanley. Please go ahead. Steve Beuchaw - Morgan Stanley & Co. LLC: Hi. Good morning. Just a couple of housekeeping ones for me. Maybe first, I'll start actually with Bryan. Bryan, in your discussion around in the prepared remarks on ASC 606, and thanks for the heads-up, you mentioned that there would be some bad debt dynamics that will impact the way we see HCT trend. I wonder if you could give us any more history on that figure so that when the time comes, we'll be able to look at the underlying trends in the model for fiscal 2018 to fiscal 2019. What did that $31 million look like in prior periods?

Yes, sure, Steve. And I think this, as I think about, ASC 606 and we'll present, it will be apples-to-apples year-over-year when you look at the comparison. But the $31 million that I referenced is simply our bad debt. Historically, when you look at other parts of our business and we move to an ASC 606 compliant revenue recognition methodology we did that for Vectra DA at the beginning of the year. That's always been that way. But I think the simplest way to do it would just be to go back and look at our historical cash flow statements where you can pick off the bad debt expense and use that against our hereditary revenue numbers. That will be the mechanics of how I would suggest looking at that.

Steve, that number has been very consistent around 5% of our history and so it hasn't really changed much over time. Steve Beuchaw - Morgan Stanley & Co. LLC: Okay. Perfect. Thanks for that. And then for Mark, just to tie up the conversation around – on GeneSight, there seems to be, obviously, a lot of focus on it and people are trying to figure out how this gets deployed, how the payers are thinking about it. I wonder if you wouldn't mind giving us any more insight into the outcome with the top 20 Mid-Atlantic payer that you mentioned. If we were to see that policy, would that be perfectly consistent with what we've been looking for, broad reimbursement, reimbursement in the neighborhood in terms of pricing of your target amount or were there any nuances there that might be worth calling out to understand how this is all playing out? Thanks so much.

Yes, thanks, Steve. As you know, we don't comment specifically on pricing for individual payers. I can tell you our discussion around the value, the test has been consistent with all the payers on, here's what the value is, here's how it can help your plan. And so, I don't think there's any differences from that type value discussion. I think as we've seen with most of the commercial payers, their view is that the physicians that probably can benefit from the most and the numbers that can benefit from the most are probably in the primary care setting, because most mental health is treated in the primary care setting. And so, that's really the dialogue we've had and the recognition that this is – that's really probably where we need even more help in the psychiatric setting. So I think it's been an all-encompassing conversation that there are definitely benefits to be had across all prescribers for this. So I think that's one of the tenors of that. I think the other thing that we have seen are interest from payers as they contemplate this on exactly what programs could we work together on to try to ensure that this gets broad scale adoption. And so we're in really value-added discussions with what are the resources we bring, what are the resources they bring and how can we collectively ensure that this gets implemented the right way. One of the things you'll note in this study is that even after, in the GeneSight arm, after we gave, there were still 9% of patients that were on incongruent medications. Payers want to work with us to make sure that's 0%. Because if in fact those 9% had all been on congruent medications, you would have seen significantly better results than we did. So the results are excellent as they are, but if all of those had been on congruent medications, you would have seen even better results across the board and likely even statistical significance for symptom improvement across the whole cohort. So that's one of their focus is, how do we get that to zero, that's been a very specific conversation that we've had with them and there are ways we can do that together. So I think the nature of the discussion has been fulsome across all healthcare providers and productive across interventions that we can do together. Steve Beuchaw - Morgan Stanley & Co. LLC: Great. Thanks for the color, guys.

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

Thank you. Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you and have a good day.