Myriad Genetics, Inc. (MYGN) Q1 2026 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the Myriad Genetics First Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. Now it's my pleasure to hand the conference over to the Senior Vice President of Investor Relations, Matt Scalo. Please proceed.

Good afternoon, and welcome to the Myriad Genetics First Quarter 2026 Earnings Call. During the call, we will review the financial results we released today. And afterwards, we will host a Q&A session. Our earnings release was issued this afternoon on Form 8-K and can be found on our website at investor.myriad.com. I'm Matt Scalo, Senior Vice President of Investor Relations. On the call with me today are Sam Raha, our President and Chief Executive Officer; Ben Wheeler, our Chief Financial Officer; and Brian Donnelly, our Chief Commercial Officer. Joining for Q&A will be Mark Verratti, our Chief Operating Officer. This call can be heard live via webcast at investor.myriad.com, and a recording will be archived in the Investors section of our website, along with this slide presentation. Please note that some of the information presented today contains 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 SEC, 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. I'll now turn the call over to Sam.

Thanks, Matt. Good afternoon, everyone, and thank you for joining us. I want to welcome our Chief Commercial Officer, Brian Donnelly, to the call as he will provide quarterly commercial business updates going forward, and our Chief Operating Officer, Mark Verratti, will join us for the Q&A portion of the call. Now considering it's been a year that I've been CEO, I thought we'd begin the call by reviewing a number of our key advancements over this time. These include, first, the prioritization of the Cancer Care Continuum. Recall last year, we updated our growth strategy and declared cancer screening and diagnosis as our business of highest importance. Since then, we prioritized our resources, budget and focus with this clear direction. And this year, we're making significant investments in the Cancer Care Continuum, including an expansion of our commercial capabilities and increased R&D spend on product development and clinical studies. Second, we have strengthened our organization with leaders that have proven experience and a depth of domain knowledge in oncology, genomics and advanced diagnostics. We've added significant expertise in multiple levels of the organization, including Brian Donnelly as CCO; Vishal Sikri as our SVP of Product; Dr. Hosein Kouros-Mehr as our SVP of Oncology R&D, along with other team members to our operations, tech, sales and marketing teams. Third, we are continuing to strengthen our execution and improve our agility. We have implemented new processes for decision-making and program oversight and have also simplified the organization structure and removed layers to serve customers better. This required making tough decisions that affected a number of our employees, not something we take lightly, but the early progress that we're seeing validates these actions and better positions Myriad to succeed as we go forward. There is still significant work ahead, but we have clear line of sight to how we will achieve our goals, including accelerated share gain and sustained profitable growth. And that's why I'm very encouraged about Myriad's current position and direction. Now let's discuss the first quarter results. We reported revenue in the first quarter of just over $200 million, coming within our Q1 revenue guidance range. In terms of testing volume, we delivered 385,000 test results in the first quarter and continue to drive strong volume growth for hereditary cancer testing in both the affected and unaffected populations, where we grew 10% and 16% over the year ago quarter, respectively. These results reflect our deep relationships across community oncology and other provider networks and ongoing efforts to enhance the testing offerings and overall experience. Brian will provide additional color in his section, but certainly, we see strong demand for our MyRisk hereditary cancer tests, which will continue to be a cornerstone of our accelerated profitable growth journey going ahead. I'm pleased with the solid growth of our mental health business. First quarter GeneSight test volume grew 7% year-over-year and is the fourth consecutive quarter of mid to high single-digit test volume growth year-over-year. We believe Q1 performance is above market growth, and this is noteworthy considering GeneSight has the leading market share. And we continue to manage this business in a very disciplined fashion to drive growth and improve profitability with a defined set of resources, budget and focus. Next, as we foreshadowed in our last earnings call, first quarter prenatal volume declined year-over-year. We continue to focus on reactivating accounts, expanding access and driving new customer wins. We expect these actions, along with the launch of FirstGene, to support a return to positive growth in the second half of 2026. As for the impact of adverse weather during the first quarter, we experienced days of slowdown in the first couple of months of the quarter, largely in the Northeast and certain Midwest territories. We saw strong March test results, so we believe weather had a marginal impact overall. Taking weather and first quarter business trends into account, we are reaffirming our 2026 financial guidance. We are expecting sequential revenue growth in the low single digits in the second quarter and accelerating through the remaining quarters as our expanded commercial team begins to positively impact second half. In addition, we reaffirm our positive adjusted EBITDA target range. While Ben will talk through this in more detail, our confidence is grounded in continued strong hereditary cancer testing growth, solid ongoing demand for our GeneSight mental health test and improved prenatal business as well as early contributions from the expansion of our commercial team. Beyond Q1 revenue, we reported solid gross margin of 69%, in line with our full year range. It's important to have a strong gross margin profile at a time when Myriad is making significant strategic investments, such as the expansion of our commercial organization ahead of a number of major new product launches in 2026. And you can see these investments beginning to run through the adjusted OpEx line. Ultimately, we reported an adjusted EBITDA loss of $4.5 million and an adjusted EPS loss of $0.09 in Q1. And as Ben will address in his section, we have a solid balance sheet and liquidity position. Turning to our Cancer Care Continuum strategy. The big news in Q1 was March launch of Precise MRD for breast cancer patients for a select set of customers. While it's early days, we're certainly very encouraged about this product and the impact it can have for patients and clinicians. I'll provide more commentary on the next slide. Before I get to that, we recently launched a variety of disease-specific MyRisk hereditary cancer panels on our stated timeline and are on track to launch our AI-enhanced Prolaris prostate cancer test in June. And thanks again to Proteomic for their partnership on this. We look forward to providing an update on these new tests as we move through the year. Now regarding Precise MRD, let me provide an update on our plans and on early feedback from alpha customers. The conversations with customers have reaffirmed our assessment of the MRD market that while greater than 75% of cancer care in the United States happens in the community, we are still in the formative stage for how clinicians are incorporating MRD testing in community oncology. That's where Myriad has a strong established presence serving nearly 3,500 oncologists today. And as more clinical publications and presentations demonstrate the significant potential benefits of ultrasensitive MRD testing for breast and other cancers, this addressable market expands, and Myriad is well positioned to serve this growing opportunity. For the alpha stage of the commercialization of Precise MRD for breast cancer, we're closely monitoring test utilization, customer experience and internal operational efficiency. While it's early in the implementation of our program, let me share some key takeaways from the first 6 weeks of the launch. First, in terms of test utilization, we've onboarded and trained nearly a dozen customer sites and onboarded and started engaging even more clinicians. We're happy with the volume of patient samples received to date and some clinicians have already ordered tests for multiple patients based on being satisfied with the results of the first patients tested with Precise MRD. Next, in terms of customer experience, clinicians have been satisfied with the quality of our test and the turnaround time for getting results from when they place the order. We have received some input on how to make the ordering easier and also learn from early samples received how we can make instructions for sample shipment clear. This another input is already being used to make changes to improve customer experience in the alpha phase and for future expanded launch phases. Finally, in terms of operational efficiency, our MRD assay itself has proven to be robust and has performed extremely well. We've been pleased with the yield of our assay and also early numbers for turnaround time for the baseline and monitoring assays, all of which are tracking within our pre-established internal targets, which we believe will allow us to be competitive with other on-market tests. Now let me update you on the overall plan for Precise MRD. First, we're pleased with the growing body of clinical evidence. This data shows that Precise MRD's high sensitivity and an ability to detect disease down to 1 part per million. We believe our MRD platform can help guide clinical decision-making for patients in their journey of cancer care, and has the ability to detect presence and recurrence meaningfully earlier than the standard of care with imaging and therefore, can have positive impact for patient outcomes. In addition to the multiple presentations and updates already in 2026, including recently at AACR, we look forward to sharing additional updates on clinical studies along with collaborators at the upcoming ASCO conference at the end of May. In terms of MolDX submissions, our plan remains to submit progress this Q3 and for colorectal and renal by the end of this year. We still plan to expand commercial testing for breast in Q3 beyond our current select set of community practices. However, based on customer input and interest, we're moving up the launch of Precise MRD for colorectal cancer and renal to a select set of customers into Q3. In summary, we're tracking to the plan for Precise MRD that we laid out in Q1 and are looking forward to serving more clinicians and patients over the course of this year while also managing our financials. Now let me hand it over to our CCO, Brian Donnelly. Brian?

Thanks, Sam. Good afternoon. Before I get into the quarter, I'll briefly introduce myself. I've spent the past 20 years building and scaling businesses across diagnostics, genomics and consumer health at companies, including Ancestry, Amazon, Illumina and GlaxoSmithKline. I've known Myriad for years and what drew me here is our category-leading assets, serving markets with meaningful unmet needs and having a clear opportunity to unlock growth through commercial innovation and execution. My focus is on driving durable revenue growth, expanding market share and improving return on our commercial investments. Turning to the first quarter and our Cancer Care Continuum business. As Sam noted previously, we have simplified how we talk about the business externally, aligning around product categories. In Q1, the Cancer Care Continuum product category, which now incorporates both affected and unaffected hereditary cancer testing as well as other genomic testing, which we previously called tumor profiling, generated revenue of $120.2 million, up 4% year-over-year. Importantly, hereditary cancer testing volume grew 14%, continuing to gain share. Growth in the unaffected population was stronger than the affected segment, and both segments grew above the market growth rates. We were pleased with the unaffected growth rate and view it as an important leading indicator for future demand. In prostate cancer, Prolaris delivered mid-single-digit growth in both volume and revenue. As mentioned on previous calls, we are actively investing in the commercial channel and other programs to improve performance and regain market share. We're also preparing to launch our first AI-enabled Prolaris test this quarter, bringing together AI, biomarker, germline and genomic insights in a single offering. This combination is differentiated and it positions us to compete more effectively in prostate cancer patient care. Turning to Precise MRD. Sam covered this well, so I'll just emphasize 3 points. First, clinical evidence continues to build with multiple study presentations at ASCO GU, ASCO GI and AACR. Additional data at the upcoming ASCO meeting is expected to further strengthen Precise MRD's positioning and support broader adoption. Second, early access sites are engaged in providing actionable feedback. And third, we're using this phase to refine workflow, usability and clinical integration ahead of broader commercialization. The commercial and medical affairs teams are actively ramping, and we remain on track for broader commercialization later this year and our full commercial launch in Q1 of 2027. Now moving to our prenatal health business. As discussed on our fourth quarter call, the prenatal business faced difficult year-over-year comparisons driven by disruption from a new ordering system and the impact that had on several large accounts. First quarter revenue was $41.9 million, down 15% year-over-year. That said, we are seeing signs of stabilization, including quarter-over-quarter volume growth in Q1. We remain encouraged that our ongoing engagement will win back share and drive overall growth in 2026. And supporting that outlook is our newly deployed prenatal-focused sales team, ongoing engagements to win back key accounts and improving payer dynamics. To that last point, in April, CIGNA updated its policy to cover expanded carrier screening panels, including Foresight Universal Plus. This is an important step forward for the category. Moving to FirstGene. We continue early access clinical testing, and we are seeing strong enrollment momentum in the CONNECTOR study. We are encouraged by our assay performance and early customer feedback, highlighting that our clinical value proposition is meaningfully differentiated. The FirstGene screen offers the first and only simultaneous screen of patient carrier status, fetal single gene, fetal chromosome and fetal RHD status, all delivered collectively in a single integrated report with the test able to be taken at an industry-leading 8-week gestational age and with an industry-leading turnaround time with all results delivered within 14 days. We remain on track for a full commercial launch in the second half of 2026, and we are investing ahead of that launch with confidence in FirstGene's ability to expand clinical insight and to grow the overall prenatal testing market. Turning now to mental health. In the first quarter, GeneSight generated $38.3 million in revenue, up 24% year-over-year on 7% volume growth. We continue to expand the ordering provider base, reaching over 39,000 ordering clinicians in the first quarter, which is a record high. This strong first quarter revenue growth reflects improved reimbursement trends and payer coverage aided by biomarker legislation, continued optimization of revenue cycle workflows and solid underlying demand and sales performance. We remain disciplined on this business with a strong focus on capital efficiency while delivering growth. I want to close with how we are accelerating growth. We're investing $35 million over the next several years to strengthen our commercial capabilities and support multiple upcoming launches. On the commercial capabilities specifically, there are 3 areas to highlight. First, we expanded our sales team by over 100 account executives compared to last year, adding meaningful field sales capacity, particularly in oncology, to increase our share of voice ahead of new product introductions. Many of these hires bring strong experience in the advanced diagnostics sector. At the same time, we're focused on improving sales productivity through better onboarding, targeting and performance management. We expect ramping new territories to take several quarters, but this investment is critical to deliver long-term acceleration and profitable growth and our second half plan. Second, we're enhancing our demand generation capability, particularly in hereditary cancer. This includes new digital patient engagement, risk assessment tools and channel partnerships designed to activate patient-driven demand in the provider channel. And third, we're preparing for one of the most important launch cycles in the company's history with critical launches across the portfolio, including FirstGene, Prolaris+AI and Precise MRD. To support this, we're strengthening cross-functional launch execution, medical education and KOL engagement, sales targeting and analytics and tools that simplify ordering and integration into clinical workflows. The objective here is faster awareness, faster adoption and stronger return on investment. So stepping back, our Cancer Care Continuum portfolio continues to show solid growth and share gains. Our prenatal portfolio is stabilizing with a clear catalyst ahead in FirstGene, and mental health is delivering strong performance with improving profitability. At the same time, we're building the commercial capabilities needed to support sustained growth and upcoming launches across the portfolio. Overall, we're early in the process, but the direction we are heading is towards improved execution, accelerated growth and positioning Myriad for sustained expansion, giving us confidence in delivering against our full year guide. With that, I will turn it over to our CFO, Ben Wheeler.

Thanks, Brian, and welcome to the earnings call team. I want to reinforce Brian's comments regarding the simplification of our product category messaging. As we discussed on our fourth quarter call, this change better aligns with Myriad's updated growth strategy and how we manage and communicate the business. Our Cancer Care Continuum category now includes both effective and unaffected hereditary cancer testing, along with other genomic testing previously referred to as tumor profiling. Prenatal health now reflects Prequel noninvasive prenatal screening, Foresight carrier screening and SneakPeek, our early gender DNA test. FirstGene is also included in this category. Our mental health category remains unchanged. With that context, let me start by reviewing the key drivers of our first quarter performance. We generated another quarter of strong test volume growth in hereditary cancer testing with 14% year-over-year growth in the first quarter, accelerating from the 11% year-over-year growth we delivered in the fourth quarter. This acceleration was driven by continued strength in our unaffected market where demand and execution remains strong. GeneSight also started the year with strong momentum, delivering 24% year-over-year revenue growth and 7% test volume growth in the first quarter. This performance reflects improving reimbursement dynamics, including the positive impact of recent biomarker legislation as well as continued progress in our revenue cycle management capabilities and overall commercial discipline. As a reminder, our engagement with health plans and biomarker loss states has been productive, driving sequential improvements in GeneSight average revenue per test for multiple quarters. While no single plan is material on its own, the aggregation of these coverage wins has become a meaningful tailwind for the business. Looking ahead, we're encouraged by additional GeneSight coverage opportunities in biomarker states and plan to extend this reimbursement playbook and payer relationships to our cancer screening portfolio. Taken together, the sustained strength in both unaffected hereditary cancer volumes and GeneSight volumes is an important proof point that our commercial performance is strengthening. The actions we've taken to sharpen focus, increase accountability and improve execution are translating into tangible momentum. Moving to our consolidated financial results. For the first quarter, we reported revenue of $200.4 million, within the revenue range we provided during our Q4 call and representing 2% growth year-over-year. Overall test volumes were consistent with the prior year as continued strength in hereditary cancer testing and mental health was offset by prenatal health. Average revenue per test improved 2% year-over-year, driven by growth in hereditary cancer testing revenue and improved reimbursement trends in mental health during the quarter. While we're pleased with the net positive year-over-year change in average revenue per test this quarter, we continue to expect modest headwinds to ASPs over the longer term, consistent with our prior commentary. We generated gross margins of 68.7% in the first quarter, in line with our full year gross margin guidance and up approximately 20 basis points year-over-year. The modest improvement reflects a favorable shift in product mix to more margin-accretive revenue. We remain committed to driving efficiency and scale in our laboratory operations for both our existing portfolio and the new product launches in 2026. Adjusted operating expenses increased by $8 million year-over-year, reflecting targeted investment in commercial execution and R&D growth initiatives. We remain committed to balancing strategic investment to support long-term growth with continued progress toward improving profitability while ensuring capital is allocated to our highest impact priorities. Taking all of that into account, we generated an adjusted EPS loss of $0.09, within the guidance range we provided. Next, I'll speak to Myriad's profitability and liquidity. As we've discussed in the past, the first quarter is typically our heaviest cash burn quarter driven by softer overall revenue and elevated expenses, and this year is no exception. First quarter adjusted EBITDA was a loss of $5 million, coming in below the near breakeven commentary we provided due to an acceleration of commercial growth investments. We're committed to profitable growth and we'll manage our annual operating expenses to grow at a slower rate than our annual revenue. We continue to maintain a solid balance sheet with access to $199 million in capital, providing us the flexibility to invest in our strategy while maintaining appropriate financial discipline. Next, I'll address financial guidance. We are reaffirming our full year 2026 financial guidance, including revenue of $860 million to $880 million, adjusted gross margin of 68% to 69% and adjusted EBITDA of $37 million to $49 million. During our fourth quarter call on February 23rd, we shared additional commentary on how we expect the year to unfold, including our view that the second half of 2026 will be stronger than the first half, consistent with recent years. This outlook is supported by current business trends and anticipated improvement in our prenatal portfolio, early contributions from the expansion of our commercial team and recent revenue cycle initiatives. As a result, we expect quarterly revenue to grow sequentially from first quarter and the low single-digit range during the second quarter and accelerate through the remaining quarters of the year as we realize early contribution from the addition of over 100 account executives. We remain confident in our full year outlook and in the team's ability to execute as we progress through 2026. Now let me turn the call back to Sam.

Thanks, Ben. Let me conclude our prepared comments by highlighting our robust pipeline of new products and enhancements this year. Many of these tests will strengthen Myriad's position across the cancer care testing continuum and support our long-term growth profile. We continue to drive double-digit growth in hereditary cancer testing, which is enabled by a combination of our strong market position, commercial execution and ongoing commitment to clinically relevant innovation as reflected in the expanded MyRisk test launched this past Q4 and the recent launch of disease-specific panels. We're encouraged about the early experience and learnings from the alpha launch of our Precise MRD test for breast cancer, and we'll soon be expanding the number of sites on a path to full commercial launch in 2027. We're investing in the commercial team and its capabilities ahead of the full launch, and we'll continue to update investors on our progress. We're on track to launch our first AI-enhanced Prolaris prostate cancer test that combines the power of molecular and AI analysis next month. And to round out the pipeline, we recently initiated commercial testing with a select number of customers for our FirstGene test and are on track for full commercial launch in the second half of the year. These new products, combined with our operational strength for sample processing and reporting and expanding commercial capabilities and commercial reach give us confidence in accelerating profitable growth in the quarters ahead. I'll now pass the call back over to Matt for Q&A. Matt?

Thanks, Sam. And as a reminder, during today's call, we use certain non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP financial results and a reconciliation of GAAP to non-GAAP financial guidance can be found in our earnings release and under the Investor Relations section of our website. Now we're ready to begin our Q&A session. To ensure broad participation we are 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.

[Operator Instructions] It comes from Kyle Boucher with TD Cowen.

I wanted to start on just sort of the revenue ramp through the back half of the year. Is there any bridge you can sort of provide for the second half growth rate? I mean I think your guidance implies first half is sort of low single digits. So it's a pretty big step-up in the back half and you reiterated guidance. I guess how should we think about the different moving pieces?

Kyle, thank you for the question. Let me start, and then I'll hand over to Ben to provide some more color. Again, first stating, we are confident in being able to be within our revenue guidance for the year. The elements of confidence, again, we're very pleased with the growth that we've seen in hereditary cancer, really in the Cancer Care Continuum. We're pleased with the ongoing performance of GeneSight, and we're also counting on improvement in our prenatal business, which has been a little bit slower than expected, but within range. You put that together with the contributions that we're expecting with the sales teammates that we've hired. You heard Brian talk about 100 folks that we've hired. That's a little -- we accelerated that. We're able to get them in. They're going through the process of being trained and prepared. All of those things are what support our confidence in being able to achieve both second quarter and the quarters ahead. But Ben, what would you add to that?

Yes. So the only thing that I would add is repeating a comment that Brian shared in his prepared remarks as it relates to focused sales forces. And so as we enter Q2 and then proceed through the rest of the year, we have focused our sales forces to make sure that they are spending time in the unaffected market, specifically selling hereditary cancer in a focused way, also in the prenatal side of the business, having a focused sales force calling on doctors and focusing on the prenatal product. We believe that will drive some pull-through on the volume side.

Got it. And then maybe just one more. I think you mentioned during the prepared remarks that you guys are coming up on one of the biggest launch periods for Myriad. Maybe can you just dig in a little bit more on how do you balance that investment that's needed to address those launches and maintaining your adjusted EBITDA profitability?

Yes. Let me start again, and Ben, if you can add on. It starts, Kyle, with a well-crafted year thinking about the timing of investments. We wanted to make sure we're able, for example, on the commercial side, to add sales team members with the right level of experience, which, by the way, we've been very pleased with the talent that we've been able to hire on, particularly to support MRD, the molecular side of cancer care, if you will, that we're building out. It's the timing of that. It's also the work that we're doing from a market activation, awareness, demand setting standpoint. And for MRD, in particular, it's the number of clinical studies. And I will tell you that we are being mindful to balance the timing of these things to match to stay within what our guidance has been overall for our profitability. Ben? Color?

Yes. So Kyle, as you know, about 2/3 of our operating expenses are related to people. And so a lot of what drives the successful launches are people investments. And you saw some of that in our Q1 expenses. In the prepared remarks, I talked about the acceleration of commercial investment, and that is to help us drive success with these launches and also to be able to drive the additional volume and the opportunity to increase revenue as we progress through the year in order to help us manage the timing. It is something that we're focused on, and we are committed to drive profitable growth. So it is something that takes a lot of our time and attention, and we're focused on delivering on that.

Our next question comes from Tycho Peterson with Jefferies.

I wanted to just touch on the hereditary strength. I know you talked about the unaffected market. I'm wondering if you could just maybe delineate how much came from the dedicated sales force versus the expanded MyRisk panel and any lift from the EMR integration as well?

Yes. Appreciate the question, Tycho. Yes, again, just to restate, we were very pleased with the continued strength actually of hereditary cancer business. I think I provided this detail in my prepared remarks, those that have cancer, so the affected market, 10% volume growth, 16% the unaffected. We think that the MyRisk, the new updated panel with 63 genes, it's been a strong point. We are the most relevant current, if you will, panel for hereditary cancer testing. It's definitely helping. As it relates to dedicated sales force, you know what, here's the good news. That is only going into effect as of April 1st. So I can tell you that really, that that was not within the Q1 numbers, didn't impact it. Now that being said, Tycho, you might have also heard that we just recently launched the various disease-specific panels for breast, prostate, ovarian, colorectal cancer. So we think that will be another good guide for us that will support part of our ongoing growth along with now the dedicated unaffected hereditary cancer sales team that we have in place.

Okay. That's helpful. And then maybe just a follow-up on Precise MRD. You mentioned pulling forward CRC and renal into 3Q. I guess just talk about the thought process there. You obviously have breast as well. So what was the rationale for pulling that forward? And how do we think about, I guess, any sort of additional resourcing?

Yes. I mean the real motivation of this, as you'll recall, again, our original plan that we stated in the last quarter was to launch in the -- around the Q4 timeline for colorectal cancer in renal. And that was to originally be timed ideally with when we submit for MolDX for both of those indications. Really, what drove our move up of that date is the interest from the community oncologists that we started to work with. And often the case is if you started to serve with breast as we have, they're also interested in other cancer indications where they're seeing those patients come in. And so we realize that we're -- we think we can still manage it within the controlled way that we're rolling out our commercialization while managing our profitability, but we think that we can actually benefit from understanding how we can serve across multiple indications in the same oncology practices.

Yes, Tycho, the only thing that I would add is we had contemplated the costs around dedicated sales folks as it relates to MRD launches. And so really accelerating CRC and renal is not an acceleration of expense per se as it relates to personnel. The last thing that I'll mention is, and you know this, hereditary cancer is the profit engine of the organization. And as we drive growth through those channels, it enables us to invest and manage expenses in that way so that we can deliver on profitable growth.

Our next question comes from Puneet Souda with Leerink Partners.

Just wanted to follow up on the commercial side. Could you update us -- you talked about a number of accounts sort of 100 account reps versus last year. Just maybe just give us more updates on do you expect further investments into commercial? How should we think about the overall productivity? To what extent they're carrying different products in the bag? Maybe just walk us through that on the commercial side.

Yes, Puneet, I appreciate the questions. Let me start and Brian, then if you can please add in. First of all, the lens through which we're really running the whole company again is by prioritizing the Cancer Care Continuum. So the vast majority of our investment, be it in these -- the addition of commercial resources or marketing campaigns, market activation, demand generation, other things are -- that's our primary focus. And then also keep in mind, this is through the construct that we're going into place this year, which we've talked about with more dedicated sales teams, particularly for prenatal as well as unaffected. Now there's a lot more to that. So Brian, why don't you take it from there?

Yes, absolutely. Thanks for the question. So I'll just -- I'll hit on the 3 pieces. The first was around the expansion of the sales team and how you think about that in terms of the future, will that continue? What I'd say is we're being really targeted as it relates to who our target providers are and what we think the right level of reach and frequency is to be able to achieve our full year guidance. So as we are looking at the expansion, we're putting it in -- we're basing it on who those providers are who we're going after. So we feel really good about the hiring we've done. We've been able to accelerate some of that hiring in the first quarter, giving us more confidence in the back half of the year. On the product front and on what the teams are focused on, the big shift that we've made with our sales organization is being very focused on the unique portfolios. As an example, in the past, we've had a Women's Health team that was covering both hereditary cancer screening and prenatal testing. Going forward, the way we've structured our sales teams are they're very focused on the portfolio. So we have a prenatal team. That team is exclusively selling our prenatal products: Foresight, Prequel and soon to be FirstGene. We have a hereditary cancer screening sales team. They are selling MyRisk exclusively. And so having that focus is not only allowing us to see more customers, but it's allowing us to have more meaningful conversations and support customer adoption of the portfolio. And then on the productivity front, the third part of the question, what you should expect and what we're expecting is it's going to -- as with any of our -- anyone in our position, as we onboard these sales reps, they're going through training. They're getting introduced to their accounts. And so you should expect it to take several quarters for them to be able to reach peak productivity. But we have a really good eye on our data, and we know what we're going after here. So we'll be making sure to continue to optimize.

And Brian, maybe I'll just add to that. Based on the time when we've been able to get them aboard and the very number of quarters you talked about, this is why we believe we're going to start seeing some productivity in the back end of the year.

Got it. That's helpful. And then, Sam, just wanted to get a high-level view from you in terms of the overall portfolio today, either in terms of additions or potential trimming that puts you both in terms of higher growth and potentially higher profitability. Thoughts there?

Yes. Thank you, Puneet. Listen, again, I'll start by saying the part of the business that is at the core, the part of the business that we are most focused on is the Cancer Care Continuum. We believe that based on the reputation we have in the market, the reach that we have, the quality of our testing and the portfolio that we have that we have a real opportunity to expand and be more than the hereditary cancer testing company. And I think we're well on our way with that. Clearly, the alpha launch of MRD is an important milestone to that. The AI-enabled Prolaris for prostate cancer is going to be another important milestone coming up next month. It won't be -- it will be the first of multiple AI-enabled products we'll bring to market over the coming years. Again, we are managing with an extreme level of discipline in focusing first and foremost on the Cancer Care Continuum. And over time, we are interested in adding other parts to the Cancer Care Continuum where we aren't as strong through partnerships and at the right time for the right set of circumstances in a more direct way into Myriad. And we'll continue to use extreme business rigor on a regular basis as we are looking at every part of the company to say, hey, does this part provide us the expected financial return, the ability to win in the market? Is this best fit for us at Myriad? But our focus again is the Cancer Care Continuum.

Our next question comes from David Westenberg with Piper Sandler.

This is [ Skya ] on for Dave. Maybe just to touch on what you were just speaking about there. On the upcoming launch of the AI-enabled prostate cancer test, how are you positioning this commercially alongside Prolaris? Is there anything we should be looking at specifically with this launch?

Maybe just to start, Brian, I'll hand it over to you. We are very excited about the AI-enabled Prolaris prostate cancer launch. As a -- I think we've mentioned this before, but once we launch this test, this will become our Prolaris test. We believe it's going to provide a step-up in value to our current Prolaris test. And also, just as a reminder, we -- in terms of reimbursement, we're not in our guidance. There is no incremental reimbursement that we're expecting at this phase. Brian, maybe you can talk a little bit about the teams and how they're getting ready.

Yes, absolutely. Yes. Our teams are actually together this week going through sales training and working through all the positioning and how we're preparing for the market launch. I would say the thing that we are excited about with regard to Prolaris+AI is really the value proposition it has in that active surveillance setting. It's a really important aspect of Prolaris by itself and the AI enhancements certainly augment the clinical value proposition there. So that's a component of how we're thinking about the product offering. And we're, as we've mentioned earlier in the prepared remarks, excited to get this offering out. We've got really positive feedback from clinicians who have seen the product offering, and we're looking forward to get it in the hands of many.

Maybe, Brian, just to add to what you said, and I know this wasn't exactly the question, but I think it is an important part of our overall commitment to prostate cancer testing. Again, we are pleased with the number of collaborators who are now working with us to give us the access to the samples that we've needed to do the clinical studies, which we believe when we're able to publish those will improve our position as it relates to the standings. So we are -- so we're excited about that as well.

Okay. Great. And maybe just secondly, on the GeneSight revenue. Is there anything to call out there on payer dynamics? And are they sustainable for you for the remainder of the year?

Ben, do you want to take this one?

Yes, happy to. So we were really pleased with the performance of GeneSight in Q1. As a reminder, we've seen improvement in GeneSight ASP for several quarters. And as we've been successful in leveraging policy changes or plans updating their coverage position relative to GeneSight in states where they've passed biomarker laws, we continue to focus on that and see opportunities ahead. I will mention, it's important for folks to recall that when you look at 2025, Q1 was the softest ASP quarter for GeneSight. And so we were pleased with the growth that we saw this quarter. We expect this quarter to be viewed as a baseline for ASP and something that we can continue to focus on building on.

One moment for our next question, comes from Brandon Couillard with Wells Fargo.

Sam or Brian, on the prenatal business, I mean, on one hand, test volumes were up a smidge sequentially, but at the same time, the year-over-year trend is still decelerating. And historically, 1Q kind of tends to be the high watermark for the year. So is it really reasonable to expect that prenatal volumes grow for the year? And how confident are you that kind of the internal issues are mostly behind you at this point?

Yes. No, I'll start here and then Brian, if you can add and Ben, you're welcome to is the internal ChatGPT and the historian of all things Myriad. Yes, first, Brandon, let me acknowledge that the prenatal volumes were a bit softer than we expected for the quarter. That is a fact. That being said, we have been pleased that with the level of interest and the ability that Brian's sales team has been able to, particularly with new customers, to be able to start driving new business there. Again, part of what gives us confidence in being able to return to growth is 2 other things, right? And sorry, Brian, I'm sure I'm taking all your time here.

It's okay.

Is, one, again, the dedicated sales channel. I think in business and sales, what you focus on and how you prioritize it, how little you distract the sales team makes a huge difference. And having absolute focus on prenatal, I think, is going to pay dividends, and that's part of our thesis of why we're confident. Number two, FirstGene. I can't tell you about how excited we are about FirstGene. You might have heard Brian talk about it in his prepared remarks, right? When it comes to market fully commercially here early in the second half, it will be the first and at that time, probably the only screen that simultaneously screens for the patient carrier, the fetal single gene, fetal chromosome, fetal RHD all delivered in a single integrated report. There is nothing out there that does that and the ability to do that as early as 8 weeks gestational age. So I emphasize this because there is differentiation in terms of value that it provides, and that is, again, part of what gives us the confidence to be able to return to a level of growth. Brian?

Yes, thanks. I'll just add a couple of pieces on this, but very well covered. So prior year first quarter was a really strong year for us as well. So when you're looking at the year-on-year comparison, it's important to remember that we were building real momentum in the prenatal business prior to that order management issue, which we saw in Q2. And so as we're passing that comp, delivering the consecutive quarter-over-quarter volume growth, standing up our dedicated sales team and launching FirstGene, we think we have the pieces together here to be able to return to growth and again, execute on our full year guide. We're watching it very carefully. We're being very thoughtful as it relates to our account engagement and as it relates to the launch of FirstGene and how we educate providers about the product offering, but we've got the pieces together here to deliver on our plan.

And one final thing to add, Brandon, because you asked that, and I should have started with that. We haven't had any internal [indiscernible] or operational issues related to the prenatal being able to take the orders all the way through analyzing the samples and returning the reports. We have no issues there at all. And in fact, we haven't had for several quarters. So really, it's about commercial execution and FirstGene being a truly differentiated assay that we think we can start to return to growth with.

Got you. That's helpful. And then, Ben, how should we think about OpEx over the next few quarters? It seems to imply that maybe that line item is flat to down as you move through the balance of the year. Just trying to back into the OpEx line based off the EBITDA guide would be helpful.

Yes, Brandon, I appreciate the question. And so you're spot on. We will manage our operating expenses as we see volume and revenue grow. And so we're committed to profitable growth. When you look at Q1 and you multiply it by 4, essentially will require some phasing of expense in the back half of the year in order to drive that level of adjusted EBITDA that we've guided to, but we're committed to doing that. So I would just repeat, yes, your -- the phasing that you talked about essentially phasing into the year is the way that you should think about it.

Our next question comes from the line of Subbu Nambi with Guggenheim.

As we get closer to FirstGene launch, where do you stand in terms of reimbursement? Have you started to get this contracted? Will the full commercial rollout be a headwind or a tailwind to prenatal ASPs in second half '26?

Thanks for the question, Subbu. And we've definitely been engaging closely as we've been doing the, if you will, the early access on FirstGene. So Ben, why don't you take your specific question of how we think about ASP and we'll be better or different?

Sure. Yes. So as we think about ASP as it relates to FirstGene, Subbu, we will build using existing codes. And so ultimately, as time moves forward, we may move to a specific or an individual code for FirstGene, but that's not where things will start. And our expectation based on experience is that FirstGene ASP will be a boon to overall prenatal ASP.

Yes. I'll just add that as you might be aware, we have a study, the CONNECTOR study, that we're doing and we're continuing to enroll and process samples there. So we had a publication -- sorry, we presented some data at a conference in the first quarter, which showed just really robust performance and also just the value of the assay. And we're pleased with the ongoing number of samples now that we have been able to process as part of the CONNECTOR study. So when you take the long horizon view, though exactly as Ben said, today, we're using codes we already have. We're also building the optionality of potentially being able to make a case for reimbursement that would be better over time.

And then in the ACOG workshop that you guys hosted, it was clear that FirstGene involves deep sequencing and that you do not complete fetal recessive testing as a reflex, but instead you do it on every patient. Could you speak to the expected gross margin profile of FirstGene? And this is not like anything in the short term, but just overall, is it accretive or dilutive to Women's Health segment on the gross margin level?

Yes. Maybe I'll start here and then Mark, you can jump in, too, and Ben, you can jump in. Yes, you're right again, Subbu, that's what I was answering a prior question that we are taking an approach which we think will provide more value to clinicians that we are providing -- we're doing the analysis at the same time for all the various indications that FirstGene provides. But that being said, I'm really pleased by what Mark and his team have done in terms of operational capabilities. The yield has been -- I'm going to knock on wood here -- extremely pleasing for where we want it to be. And in terms of gross margin overall, maybe Ben, I'll let you take that part.

Yes. So as I mentioned, from an ASP standpoint, it is accretive to the portfolio. Due to the lab process, it's essentially costs associated with processing the sample will be a little bit higher than our existing portfolio, but we have an efficient and effective process that enables us to have a very short turnaround time. So I would think about that as a singular lab process or processes as opposed to sequential multiple lab processes. And so ultimately, where that lands you is margin accretive to the portfolio. You've got stronger ASP, you've got marginally higher COGS. Ultimately, you've got stronger gross margins.

And our last question comes from Mason Carrico with Stephens.

I think I may have heard you say you expanded your sales team by over 100 reps compared to last year. Are you willing to provide, I guess, a bit more insight into the split of those reps across MRD, prenatal, Prolaris, really just your commercial teams more broadly?

Thanks for the question, Mason. Yes, we are excited again by the expansion, 100 individuals that we've added so far this year. While I won't get as granular as perhaps as you just asked, again the guidance is -- or to help answer your question, the vast majority is related to the Cancer Care Continuum. So there are individuals who are further helping us grow with reach and frequency for hereditary cancer testing. We believe that continues to be a $7 billion market that is less than 50% penetrated. We are the pioneers in that. So we believe there's a lot of room opportunity to continue growing for some of the resources that have been applied there. MRD, clearly, an incredibly important area for us, and you've heard us talk about that. So yes, we've added a meaningful number of individuals who have background in molecular to that space. Prolaris as well prostate cancer, that is an area that, along with AI, along with the other things that we've done working on the NCCN guidelines I was talking about, we've added there too. So I'm sorry, it's probably not the granularity that you're looking for. But we -- what I would leave you with is, yes, we have been very deliberate, Brian is a very deliberate guy, but the primary focus is on the Cancer Care Continuum.

Got it. Okay. And in terms of the back half ramp in prenatal, how dependent, I guess, is that reacceleration on a successful launch and positive reception to FirstGene maybe versus your broader operational initiatives to improve performance of this segment? I think I've heard you guys mention a number of times that that launch is a key opportunity to reengage with some of the accounts where you lost volumes.

Yes. Now, great question. I appreciate it. And maybe I'll start here and Brian, you can build on this. We believe these things come together, right? They are collectively going to allow us to resume growth. The thing is, numerically, we know we have a formula that we can use based on our experience of how much value each sales rep should bring, particularly as they ramp. We have that. That's a formula thing. We also believe that FirstGene is not only an opportunity -- it's an opportunity to both to regain some share that we've lost, particularly based on some of the challenges we had with our own order management system. And that's based on a number of customers saying to us if you have this product, then we love to work with Myriad because it is differentiated. I think just -- I answered some of how it's differentiated on a prior question, plus we also have, I think, the industry-leading support for genetic counselors, all those things that are needed on the front and the back end, that's a real differentiator. And we also believe FirstGene is an opportunity to expand the market. Remember, 2/3 of the fathers -- male partners are just not available for one or another reason. So this is a market expansion opportunity. Brian, is there anything else you'd add to this?

So just to reemphasize, I think, some of the points you made. It is not a one or the other piece, right? And everything you said is spot on, which is FirstGene will be really great for us to be able to reengage with customers. We have expectations in terms of our core business growing, and we have some expectations in terms of FirstGene being adopted. And based on your question, it felt like you were asking like do we have heroics planned as it relates to FirstGene. The answer to that is no. We have very -- what we think is reasonable growth assumptions in the back half of the year for the launch and for our base business.

And this will conclude the Q&A session. I will pass it back to Matt Scalo for closing comments.

Okay. Thanks, Carmen. And this concludes our earnings call. A replay will be available via webcast on our website for one week. Thanks again for joining us this afternoon, and have a good night.

And this will conclude our conference. Thank you for participating, and you may now disconnect.