Good day, and thank you for standing by. Welcome to the Myriad Genetics Second Quarter 2025 Financial Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Scalo. Please go ahead.

Good afternoon, and welcome to the Myriad Genetics Second Quarter 2025 Earnings Call. During the call, we will review the financial results we released today. And afterwards, we will host a Q&A session. Our quarterly 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, and on the call with me today are Sam Raha, our President and Chief Executive Officer; Scott Leffler, our Chief Financial Officer; and 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 our Investors section of our website, along with the 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. With that, I'll now turn the call over to Sam.

Thanks, Matt. Good afternoon, everyone, and thank you for joining us. Before I begin, I want to share that I believe today, as I did when I joined the company, that Myriad is really good at a lot of things, and we have significant potential, but we have not lived up to our potential yet. I'm excited about the journey we're on to live up to that potential by focusing on high-growth market segments and executing with stepped-up urgency and strengthened execution rigor. Let me start with our results. I'm pleased to report on the overall progress the team has made, both financially and operationally in the second quarter. We generated revenue of $213 million, representing an increase of 5% year-over-year when you exclude UnitedHealthcare's decision on GeneSight and the divested European EndoPredict business. Growth in average revenue per test during the second quarter was up 2% year-over-year with growth across most of our tests year-over-year was a leading contributor to our strong Q2 results. This growth in underlying average revenue per test has been enabled by great execution in Q2 and over many quarters on multiple programs that are part of our pricing improvement operational plan by our strong revenue cycle team. There are no material revenue contributions from prior periods. This momentum certainly provides a nice tailwind in the second half of the year and supports our profitable growth journey. Our strong results were also enabled by the actions we have been taking to address the challenges we noted on our Q1 call. I'm pleased that our execution has been better and quicker, contributing to our better-than-projected revenue growth, a step forward on delivering on Myriad's potential. Now I want to talk about testing volume. We continue to have strong volume growth for MyRisk HCT in oncology at 14% over the year-ago quarter. We saw a return to volume growth from MyRisk HCT for unaffected as our efforts on addressing previously identified challenges with customer workflows, including EMR functionality, are starting to be addressed, which Mark will talk about further in his section. GeneSight volume increased from low single digits to 5% growth year-over-year as we had anticipated based on our organization settling in after deliberate cost savings related actions we made in Q1 and our focus on targeted accounts. Prolaris volume, as we anticipated, was slightly down year-over-year against a strong Q2 of 2024 comparison, but up 6% sequentially over Q1 of 2025. Volume for our legacy prenatal products, Prequel and Foresight, declined 7% year-on-year. This was based on challenges we had with implementing an order management system, which slowed down orders in Q2. I've been close to this, working with our CTO, Kevin Hass, Mark Verratti, and our Chief Commercial Officer, Brian Donnelly. We have fixed the prenatal ordering system issue. There's no remaining impact to customers, and we expect to see improving trends in prenatal volume growth starting in Q3. Along with maintaining strong growth for hereditary cancer testing in oncology, mid-single-digit growth for GeneSight, and resuming growth for our prenatal products, we are actively executing programs to increase growth for HCT and unaffected and Prolaris. We believe these actions will lead to increasing volume growth in Q3 and Q4 and enable us to enter 2026 with momentum. Turning now to profitability. We generated strong adjusted gross margin, 71.5% in the second quarter or 140 basis points greater than last year and closely managed our discretionary spend as reflected in our adjusted OpEx line, ultimately reported strong adjusted EBITDA of $14.5 million or 24% growth over last year and $0.05 of adjusted EPS for the second quarter. I'm pleased that Myriad secured a $200 million term loan from OrbiMed, a well-known investor in the health care industry. We ran a thorough process working with Evercore, and we're very happy with the number and quality of interested lenders. We're excited to partner with OrbiMed on the credit facility, which provides us with liquidity and flexibility to support our growth journey. The journey ahead will be enabled by our updated strategy intended to drive accelerated growth and profitability by focusing on the Cancer Care Continuum, which we will refer to as the CCC. Before I share more about our strategy, let me note that based on our Q2 results and the progress we're making on addressing identified challenges, we are raising guidance for 2025. Scott will share more details in his section. Now on the next slide, I want to provide a summary of our updated strategy.

Thanks, Sam. Turning to the second quarter. I would echo Sam's comments regarding the strong broad-based trend in average revenue per test, which was driven by a combination of test mix, sales targeting, revenue cycle projects, and expanding payer coverage. Looking at our businesses, hereditary cancer revenue grew 5% for the quarter, reflecting 10% volume growth year-over-year in our oncology channel and a modest but improving 3% volume growth in the unaffected population. This improving volume growth trend in the unaffected market is particularly important as it reflects an improving EMR environment due to focused workflow improvements put in place in our first quarter. As we discussed in Q1, we are expanding our breast cancer risk assessment program including a fully automated process that enables providers to rapidly identify patients who qualify for additional screening. We continue to see positive momentum in our initial sites and expect to make further investments in our commercial capabilities to accelerate this program through the second half and into 2026 to fuel growth in our MyRisk volume. Our prenatal performance was mixed in the quarter as revenue grew 7% year-over-year, helped by expanded payer coverage for Foresight expanded carrier screening, but volume growth declined due to temporary interruptions encountered in the transition of our internal prenatal order management system. We have fixed the issue in the second quarter and do not anticipate further disruptions from our system change. Moving to oncology, in the second quarter, total oncology revenue grew 4% over the second quarter of '24 driven by strong hereditary cancer testing. I would call out that our MyRisk test continues to gain share in the affected market in the second quarter as volume grew 14% year-over-year. Shifting to prostate cancer, Prolaris revenue in the second quarter grew 4% year-over-year, an improvement from the last few quarters. Overall demand remains relatively consistent with 2024 trends and does not appear to have been impacted by the Q4 '24 update to NCCN guidelines. And now that we have announced our partnership with PATHOMIQ, we are excited to incorporate their AI technology platform into our portfolio. With the target of a first quarter '26 launch, Myriad will be the only company to offer AI, biomarker, germline, and tumor profile testing. Although our volume has been relatively consistent, we are not pleased with this business performance and feel Prolaris has strong clinical utility and provider support. As mentioned on previous calls, we are investing in the commercial channel and other programs to grow and regain share in this market. I'm also excited to call out, in collaboration with National Cancer Center Hospital East in Japan, new clinical data regarding the use of Myriad's ultrasensitive Precise MRD test that was presented at this year's American Society of Clinical Oncology Conference in May. This data showed that 100% baseline sensitivity and that 60% of patients testing positive one month after surgery had levels only detectable via our ultrasensitive MRD test. We are excited to commence an early access launch of our ultrasensitive Precise MRD test in the first half of 2026. Moving to our Women's Health business. In the second quarter, Women's Health delivered revenue of $90 million, an increase of 4% over the prior year period. As I mentioned earlier, we are pleased to see incremental positive momentum in hereditary cancer testing in the unaffected market, with revenue growth of 1% and volume growth of 3% year-over-year. We remain optimistic about our increasing tailwinds from EMR integration and breast cancer risk assessment program implementations. In addition, we are seeing continued positive traction in hereditary cancer testing from our expanded commercial partnerships like Jscreen. As for prenatal testing in the second quarter, we encountered modest volume headwinds as we discussed; we fixed the internal issue and anticipated prenatal test volume to accelerate in the second half of the year. As for our commercialized tests, Prequel at 8 weeks and Foresight, we continue to see positive demand. And I would call out incremental positive payer coverage for the expanded carrier screening panel ahead of any ACOG guideline update. Lastly, the team is excited about the early access launch of our first gene multiple prenatal screen in June. We believe this test provides added insight to providers and has the potential to expand the overall addressable market. We are looking forward to a full commercial launch next year.

Thanks, Mark. I'll start with a recap of our Q2 consolidated financial results. For the second quarter, we reported revenue growth of 1% year-over-year, with test volume down 1% but average revenue per test up 2%. The improvement in second quarter overall revenue per test reflects a combination of product mix and the expansion of payer coverage for a number of tests. There was no material contribution from prior periods in either the second quarter of 2025 or 2024. Therefore, we have a fairly clean view of underlying organic rate trends, which continue to be very encouraging. While Q2 rates were unfavorably impacted by the change in UnitedHealthcare policy with respect to GeneSight coverage, we continue to see a positive trend in underlying rates across our portfolio. This is a continuation of the generally positive trend we have been reporting for at least a year now and represents another proof point for the great work being done by our revenue cycle and payer markets teams, along with others throughout the company. As we have said before, I want to emphasize the sustainable nature of these improvements, which we believe represent both the great work being done by our team as well as the maturation in the reimbursement landscape for our products. As Mark pointed out, the hereditary cancer testing in the affected population saw the strongest revenue growth in the second quarter, with revenue increasing 9% year-over-year. Our Pharmacogenomics business saw revenue decline 12% year-over-year due to the impact of the UnitedHealthcare coverage decision, but volume growth year-over-year rebounded in Q2 as the team adjusted to reallocated resources. You may recall that we attributed the underperformance in GeneSight volume growth in Q1 to the transition associated with our reorganization of the commercial organization in pharmacogenomics. We had predicted that once the newly organized team had more time to stabilize, we would see a recovery in volume growth trends. The recovery to mid-single digits volume growth for GeneSight in Q2 is a validation of that view. The combination of a reacceleration in GeneSight volumes and unaffected HCT volume represents an important proof point in our efforts to recover from the headwinds we cited in Q1, buoyed by the incremental strength in reimbursements. Even with the modest overall Q2 revenue growth, we were able to expand our gross margins by 140 basis points to 71.5%. This year-over-year improvement reflects favorable test mix, expanding payer coverage, and lab efficiencies and is a testament to the power of our scalable business model. Second quarter adjusted operating expenses increased minimally year-over-year and reflects cost controls across SG&A. We continue to focus on striking the right balance between investment for future growth and profitability, with a concerted effort to divert spend to areas consistent with our strategic priorities. While we are pleased with the favorable progress in our overall business results, we did have a significant non-cash negative item impacting our GAAP results. Due to the significant and prolonged decline in our market capitalization this year, we recognized impairment charges of $317 million of goodwill and intangibles in the second quarter. This charge is non-cash and excluded from non-GAAP EPS. It is important to emphasize that this charge does not represent a meaningful change in our business outlook. We are simply following standard accounting practice, which required that we test the carrying value of our goodwill and intangibles in light of the drop in market cap. Without getting too deep into the mechanics of the process, our testing result was adversely impacted by factors such as much higher assumptions regarding cost of capital in connection with the drop in market cap. So I would characterize the charge as the result of developments that had already occurred earlier in the year as opposed to any deterioration in expectations. Next, I'll speak to the trends supporting overall robustness in revenue per test. For a while now, we have provided details regarding a number of key drivers for sustainable progress in average revenue per test, including various investments and initiatives by both our revenue cycle and payer markets teams. We continue to see positive traction from these ongoing investments in revenue cycle workflows and from our ongoing payer engagement activities. These include, among other things, working with health plans to encourage their implementation of medical policies that conform to state biomarker legislation. As discussed on prior earnings calls, there is a growing list of states that have passed biomarker legislation that lends itself to ensuring access to precision medicine and advanced diagnostics. As we've mentioned, we recently received expanded commercial and Managed Medicaid coverage for GeneSight, and as Mark called out, we are pleased to see California's Medicaid program, Medi-Cal, commencing coverage beginning in September. And there are several other payers who have moved forward with GeneSight coverage. Perhaps the most significant area of progress has been in prenatal testing, where we have seen a significant uptick in payers covering expanded carrier screening, even without an update to ACOG guidelines that has been anticipated for such a long time. We applaud the progressive approach that many payers are now taking to cover ECS testing, and we see this trend continuing to benefit prenatal reimbursement going forward. Year-to-date, our team has won 49 new product coverage or medical policy expansions from payers as we seek to bridge gaps in coverage across our no-pay universe. As I have said in the past, no one of these wins will generally meaningfully move the revenue needle, but we certainly expect the accumulation of many small and medium-sized wins over time to contribute to the maturing and more stable rate environment for our products. Next, we'll take a deeper look at the unusual items impacting our year-over-year revenue trajectory to provide a better sense of performance of the underlying business. While revenue in Q2 of this year compared to Q2 of 2024 grew 1%, you've also heard Sam reference a second-quarter 2025 revenue growth rate of 5% after adjusting for the impact of certain items on our Q2 of 2024 baseline, namely, UnitedHealthcare's net impact on GeneSight of $7.1 million and the divestiture of our EndoPredict European business of $2.4 million. With these adjustments, we are able to show what we consider to be a clearer view of Myriad's underlying performance trends. Next, let's discuss the company's recent capital raise. Last week, we entered into a 5-year term loan with OrbiMed, a well-known health care investor. This agreement provides Myriad an initial tranche of $125 million immediately at a floating rate of 1-month SOFR plus 650 basis points or an annual interest rate of approximately 11% at current rates. The agreement also has a 2-year option to draw on an incremental $75 million of committed financing reaching a potential total loan amount of $200 million. Initial use of proceeds was to replace our existing ABL facility from which we had drawn $60 million as of the end of Q2. Including the option to draw on the second tranche of the facility, we have an estimated total potential liquidity of over $200 million. We are thrilled with this financing and consider it to be a significant upgrade from our previous capital structure. While the interest rate on drawn amounts was previously lower, our previous ABL was a short tenor facility with only minimal opportunity for incremental financing given its reliance on accounts receivable balances. Our objective was to obtain a larger amount of financing in order to ensure multiple years of liquidity comfort and the ability to invest as needed in areas of strategic prioritization. This facility provides that. While the rate on the initial tranche is higher than the ABL rate, we are excited to have the second tranche of committed capital at minimal cost. The blended rate we are paying for $200 million of committed capital for both the drawn first tranche and the undrawn second tranche is approximately 7%. Lastly, we generated $14.5 million of adjusted EBITDA in the second quarter, a significant improvement over the first quarter. The combination of our strong gross profit base and increasing levels of adjusted EBITDA profitability demonstrate the profit and cash generating potential of the business, especially as we generate more operating leverage over our operating expenses. The fact that we're able to generate such a strong EBITDA quarter, despite the headwinds that we have encountered this year, is a testament to the profit-generating potential of the business as we reaccelerate growth. Next, I'll cover our full year 2025 guidance. For the full year 2025, we are updating the financial guidance that was previously updated in May. We are raising our full year revenue range to $818 million to $828 million, largely reflecting our positive Q2 revenue performance. We are also increasing our gross margin range to between 69.5% and 70%, and increase in the adjusted OpEx range to between $562 million and $568 million. We are keeping our adjusted EPS between a loss of $0.02 and a gain of $0.02 for full year 2025, reflecting the incremental interest expense associated with the new financing. Lastly, we are also raising adjusted EBITDA to between $27 million and $33 million. We are not providing quarterly guidance. But please recall that the third quarter is seasonally slower than the second quarter. In addition, Q3 of 2024 will be an unusual comp due to a large almost $9 million added period benefit in that quarter, which we do not expect to repeat this year despite the fact that the underlying rate environment remains even stronger in Q3 of this year than it was in Q3 of last year.

Thanks, Scott. Overall, Q2 results were positive and demonstrate the profitability potential of our business model. Strength in our core oncology HCT franchise continues and an improving unaffected HCT business reflects progress with the EMR integrations. We think these trends will continue in the second half. Q2 also demonstrates the ongoing execution of our payer markets group, supporting more coverage of our portfolio further supporting overall growth and profitability. The team is also excited to move forward with a clear, focused growth strategy. The priorities that underpin this strategy will go a long way to enhancing our focus and execution rigor across the organization. While we plan to provide additional details in the coming months, our updated strategy better positions Myriad to achieve this mission, advance health and well-being for all, and to positively impact an increasing number of patients while driving accelerated growth and profitability. I'll now pass the call over to Matt for Q&A.

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 the Q&A session.

Our first question comes from the line of Doug Schenkel from Wolfe Research.

I really want to focus a couple on the strategic review. I appreciate all the qualitative details. I do think it would be great if there were more specific KPIs that we could use to measure progress, both in terms of the near term and the long term. Is the intent of this update today to demonstrate, hey, we're making progress. We're working on this but to basically make the point that the KPIs are coming soon? So that's the first question. The second is the language you're using seems to suggest that you've completed the strategic review of the portfolio. So should we essentially believe at this point, there's not divestitures coming, you are happy with the portfolio plus the pipeline as currently built? And then last one, I will get back in the queue after this. A lot of what you described makes sense. I would also say like a lot of it sounds pretty unobjectionable, and I would imagine that would also be the case with some of your predecessors. They also wanted to grow more than the market. They also wanted to grow revenue more than OpEx, things like that, that make a lot of sense but are objectionable. What is the biggest thing that's changing here relative to previous administrations?

Doug, thank you very much for the questions. I appreciate it. You're absolutely right. This was meant to provide an update on our strategic review, clarify our core areas of focus, and outline our plans over the next five years. We believe executing these strategies will lead to accelerated, profitable growth in the high single digits to low double digits. We will be measured and look forward to sharing details on key performance indicators and further specifics in a more quantifiable manner in the coming months, perhaps at JPMorgan, as we continue this additional work. Regarding your second question about our satisfaction with the portfolio and thoughts on divestitures, our recent work has given us real enthusiasm about our strategy and how we can implement it to foster this growth. As part of our management approach, we will regularly review all product lines, including GeneSight, to assess their alignment with our strategic objectives. This is how we plan to proceed. Lastly, I appreciate your perception of what we've shared as non-objectionable. I take that as a positive sign, but your point about what this means moving forward is well taken. We are concentrating on high-growth market segments. While our oncology franchise has been significant, primarily in hereditary cancer testing and HRD, it's evolving to encompass other high-growth applications. Importantly, we are not solely reliant on Myriad; partnerships will play a crucial role in this transformation. Another critical shift is our heightened urgency and discipline in execution, aimed at making us a highly functional, high-execution organization. These elements, combined with a team that truly understands the market and our strategic intent, will be key to delivering on the goals of our new strategy.

GeneSight clearly plays a significant role as a flagship product for your company and has been affected by the United coverage. I understand that you expect to receive feedback in the fall. Could you provide details on what has been submitted to United? Are there any initial discussions that offer insight into when this issue might be resolved? It would be helpful to know what our expectations should be. Additionally, are you receiving any requests for further reconsiderations from other commercial payers? I have a follow-up question.

Yes. Let me thank you, Puneet. I appreciate the question. I'll start, and then I'll hand it to Mark to add additional details. So again, we are happy that we've been able to, through the actions we've deliberately taken, increase the growth of GeneSight back to where we expected it to be by year-end, which is mid-single digits. And kudos to the team for the refocus, the execution, and our revenue cycle team and payer markets team, which continue to really drive opportunities with new payers. And then I'd hand it off to Mark about timing and other things that you're asking. Nothing's changed on that, but I'll let Mark detail what we've shared in the past in terms of time points, what we're doing. Again, to dispel this point, we haven't traditionally had a lot of commercial payers that we have agreements in place with. And no, we haven't experienced that. Quite the opposite, as you heard, I think, in Scott's prepared remarks, we're actually seeing a number of new carriers that are joining.

Yes. Thanks, Sam. So Puneet, just to give a little color to Sam's last comment, which I think we stated, right? We've had several wins across different commercial payers, mostly related to biomarker laws both in Q1 and in Q2. So we are seeing positive movement there for GeneSight, and it's across some commercial plans as well as Managed Medicaid and of course, Med Advantage plans as well. Related to United, which we also said on the call, we plan on submitting 3 publications as part of United's typical review cycle, which takes place in the fall. Two have already been published both in the Journal of Clinical Psychopharmacology. One was an economic utility study that we did with Optum. The other one is a new meta-analysis focusing on the randomized trials related to GeneSight, and a third is a sub-analysis related to the large prime care randomized trial that was done through the VA. So we plan on submitting those in the fall. We would expect United to review those as part of the typical review process. So we would expect to hear either status quo or potentially a change in that policy, November, December time frame, which is when they usually announce, and the effective date would be the beginning of 2026.

Got it. That's very helpful. Can you confirm if the timing for the MRD launch has changed from a full launch in the first half of '26 to an early access launch? I wasn't clear on that, so if you could clarify. Also, we noticed your ASCO data. What still needs to be completed in the validation studies? Are there any additional studies we should anticipate regarding MRD before the early access phase begins?

Thank you for that question. We are making good progress on our MRD clinical studies, with over 20 currently underway. By the end of the year, we anticipate completing more clinical utility work and plan to submit for MolDX in Q1. If the timelines follow the usual course, we expect approval from MolDX towards the end of the year. However, we are making a strategic decision because we believe it's crucial to bring our test to market so that important providers can begin using it in patient treatments. We aim to accomplish this in the first half of the year. Therefore, we will strategically move forward with a limited early access program, focusing on a select number of providers who will use it in medical care, rather than launching it broadly to everyone.

This is Kyle on for Dan. I wanted to go back to the sort of mid- to longer-term guide here of high single digits to low double digits, not too far off from where you were before, 12% plus. But maybe can you just walk us through what the puts and takes there are across the portfolio just given that you'll be layering in some new tests with MRD, et cetera? How should we think about the different segments in the context of your guide?

Sure, I can begin. Scott, feel free to add your insights. Thank you for your question, Kyle. We plan to provide more detailed and quantifiable information, including our growth rates and key performance indicators in the upcoming months, including at JPMorgan. If you assess our strategy, particularly our second focus area on prenatal and mental health, we aim to grow at or above market rates. The prenatal market is expanding in the low to mid-single digits, and we believe we can exceed that growth due to recently launched products, like FirstGene, along with our enthusiasm for it. GeneSight in mental health has also started to see growth again in the mid-single digits, and we hold a leading position in that market. We see promising growth in hereditary cancer testing as well, aiming for high single to low double-digit increases. This encompasses both affected and unaffected cases. Moreover, we are entering new areas that are crucial for our strategy, such as minimal residual disease monitoring and comprehensive genomic profiling through our own efforts and partnerships. These products should also see growth in the low double digits. When you combine these efforts, including those focused on prostate cancer, and considering our partnership with PATHOMIQ, which is set to launch our first combined product in Q1, we feel confident about achieving high single-digit to low double-digit growth. Hopefully, this provides some clarity on our growth potential.

Yes, I don't have any more details on the financial targets at this time, but I'll just reiterate Sam's comment that we weren't necessarily intending to provide a formal and fulsome update to our LRP right now. That will come at a later date perhaps by the end of the year or the very beginning of next year.

This is Jason on for Yuko. Congratulations on the quarter. Maybe just a question on Prequel. I'm wondering how has traction for the test been since the launch in 4Q of last year? Has it been ahead of expectations or in line? And given the test's differentiated 8 weeks gestation age approach, have you seen any share gains from other players in the space?

Jason, thank you very much for the question. Mark, why don't you take this one on Prequel and how its traction in the interest of the 8-week gestation?

Look, I think as we've said before, we're excited about the launch, and we've seen tremendous uptake mostly because as we stated at that 8-week time frame is typically when that is the first prenatal visit. And so it fits very nicely within workflows. So we have seen an uptick. We have seen volume increase there related to the test being ordered earlier, which is great. As far as our ability to be able to tease out the differentiation of stealing share, I think that's been a little bit more challenging. But as Sam mentioned, as we see growth there, we'll try to highlight that moving forward.

Congratulations on the quarter. I apologize if I'm repeating questions. I've been moving between different queues here. I want to ask about the prenatal. You mentioned some issues with the new management ordering system. Can you provide any details on that impact, and if you have yet to do so, what steps are being taken to resolve it and how soon it might be resolved? Additionally, I want to confirm that when this issue is addressed, there won't be a change in provider. Can you reassure us on that?

Yes, I'll start, and then I'll hand it over to Mark. Thank you for the question, Dave. I just want to clarify that there was a redundancy. The issue was related to an order management system, which has been addressed. We not only identified it but we've also resolved it. Mark, there are other parts of the question as well.

Yes. I think the other parts of the question. So again, we have resolved it, so we don't expect it to continue at least from a system error perspective to continue into Q3. From a provider perspective, look, many of our accounts use multiple providers, and so we see shifts throughout the quarter. So I don't know if we can quantify it. I think our results this quarter and our excitement about prenatal products growing in the back half of the year pretty much reflect the way we feel about resolving the issue and about the strength of Prequel, as the previous caller asked around Prequel at 8 weeks as well as the strength in our Foresight product as well. So...

I'll just add to that. This is Scott. If you look at overall prenatal volumes, at least on a year-to-date basis, they're down about 4%. That is something very different from what we normally expect in that line of business or product category; we would expect something in the high single digits to low double digits. You can attribute that impact to the disruption.

I want to probe into the guidance raise. Obviously, you lowered last quarter, now you're raising. Maybe just for the back half of the year, how much is hereditary? Just talk about where the incremental step-up is. Also OpEx is going up. Curious about that given some of the cost-out initiatives. And then I did want to probe on the LRP. I know you got the question earlier. But did anything change in kind of your end market growth assumptions relative to last fall?

We'll go backwards. Tycho, thank you for the question. In terms of your last question, no, nothing material. It's not due to a significant market increase or anything like that. It's really about our ability to engage meaningfully in other areas of Oncology or the Cancer Care Continuum, which we are not currently involved in, as well as strengthening our own products. Those are the key drivers. Scott, before I pass it over to you for more insight, I want to reiterate that in this quarter, we have clearly identified the challenges and issues that were some of our biggest hurdles in Q1.

In terms of the question around kind of the composition of the LRP, I think what we have communicated in the past was that we thought based on the significant no-pay opportunity that we still have, even after all of the great progress by our revenue cycle and payer markets team that we thought we could continue to contribute 100 to 200 basis points per year from revenue cycle and payer markets initiatives. Even with the strength that we are seeing this year, and we are very excited about it, particularly when it comes to kind of the progressive position many payers and LBMs also are taking in terms of coverage for expanded carrier screening, even with that, I don't think we'd be ready yet to move off of that longer-term expectation around 100 to 200 basis points.

I guess I have a couple of follow-up questions going back on the strategic plan. I'm just trying to wrap my arms a little bit more around the oncology strategy. I mean I think I get it, you're saying you're going to add a bunch of additional products to try and grow in that channel, and you may do that on your own, you may do that through partnership. But maybe just talk to us a little bit about sort of your right to play in that market. What is it about your position in hereditary cancer that sets you up to have success in the other areas of oncology testing and help us think about how you might compete relative to the oncology testing companies that are already out there with multiple therapy selection tests and MRD, et cetera? And I have one follow-up.

Yes. Thank you very much for the question, Bill. I appreciate it. And it's very important. Listen, what we believe we bring that's differentiating that we're going to be able to leverage includes, like you said, because of our hereditary cancer leadership, being the gold standard in the market with that as well as HRD, we have a reputation. We have a lot of trust. We also have access into thousands of the most relevant healthcare providers and systems. We also hear loud and clear through our primary and secondary research that increasingly healthcare systems and providers really want to down-select to just a handful of providers that can provide them the most critical tests along the cancer care journey for a patient. So it's our ability, once we're there, we know that if we're able to provide other tests that are meaningful, that are easy to use and access, that we have a right, along with the fact that we have heard, and this is something that we already have strength in is being able to provide a unified report, which makes it easier to interpret from multiple tests that is to help, particularly when you're thinking about a molecular tumor board, then you have that information that accelerates decision-making. So it's those things along with adding to our portfolio and focusing in where our strength is, right? We are going to focus in, for example, on MRD where we know our ultra-sensitive differentiated assay makes a difference to look at these low shedding tumors, and we're going to focus in on breast because that's one place, and we all have an established reach, reputation, and trust with that community.

This is Ricki on for Subbu. You got a few on women's health already, but wanted to see how the ramp for SneakPeek has been going so far and it's near almost a year on the market. And if you've seen the goal about funneling patients from SneakPeek to Prequel starting to materialize yet. And then also just wanted to revisit the strategic update here in the context of women's health and mental health. Could you just provide some more color on what's new here incrementally like compared to prior comments in the last Investor Day?

Yes. Maybe I'll take this and Mark or Scott, if you want to add in, please do. But I mean listen, our SneakPeek business is one that strategic intent was really to complement, get in early on the cycle of engaging with a woman in her overall pregnancy journey. Quite honestly, it's been a challenge for us. And it's been an area that we still believe has a lot of potential, but given the areas we're focusing on, it hasn't been something we've spent a lot of time in the immediate time trying to optimize. So more on that as we have a chance to go into the next level of our own planning on our strategy. Your second question is like what's net new? It's a great question. Again, so let me just be very clear. For prenatal health, we believe that the recently launched products, it's not just the NIPS Prequel at 8-week gestation age. It's also the expansion we had to our Foresight expanded carrier screening assay as well as now the early access, which we launched in June for FirstGene, which is the combined screen, right, which brings the benefit of both NIPS together with carrier screening. Those things, we believe, will allow us to differentiate and grow at or above market. And on mental health, again, it's really a focus in on being able to execute with more precision on targeted accounts and continue to drive improvement in our overall payer markets and revenue cycle activities. One huge, huge, huge important difference from before is our absolute commitment to be deliberate in the level of resourcing focus and investment we will put into these businesses. It's going to be in a very focused, targeted way because our intention is to really focus in and grow the Cancer Care Continuum business. That's the difference.

I have one question to help us move along. I'm interested in your expectations for above-market growth in the future. How much of that growth do you anticipate will come from capturing market share from competitors compared to more effectively reaching under-served segments of the market? Given the significant implementation of EMR and similar developments across the industry, I'm curious about the realistic potential for gaining market share in a more competitive environment.

Yes, thank you for the question. The short answer is that we are excited about participating in the Cancer Care Continuum, particularly in large, high-growth markets. The overall growth numbers we’ve provided, which indicate a 5-year high single-digit to low double-digit increase, reflect our intention to grow with the market in those areas. We aim to improve our performance, and we believe we can achieve this through our competitive tests that provide value by offering easy-to-understand reports. Over time, many tests are becoming less differentiated, although we see a unique opportunity in MRD due to our low parts per million detection capability. In GeneSight, we plan to grow along with the market as we hold a strong position as market leaders. We also see potential growth in the prenatal sector, where the market is expanding at low to mid-single digits. We expect to outperform this growth due to our recently launched differentiated products and more in the pipeline. Additionally, Brian Donnelly's arrival as our new Chief Commercial Officer brings a fresh perspective on enhancing our commercial execution, complementing the great work done previously.

Sam, at a high level, you talked about one of the increased R&D investment to support the cancer strategy. Can you do that within the current R&D investment run rate? How much is currently allocated to oncology? And how much incremental spend should we kind of anticipate there in the next few years?

Yes, that's a great question. Thank you for asking. As we mentioned earlier, we're not providing specific details on our financials at the moment, but we plan to share more as the months progress, particularly as we approach JPMorgan. To answer your question, we believe that by carefully managing our R&D spending, we can grow our investments significantly in this area. It's important to note that we anticipate our revenue will increase at a faster rate than our operating expenses, and we are maintaining a disciplined approach overall. The financial profile of the company is improving over this five-year period, and we are confident we can enhance our R&D and oncology investments in a meaningful way to meet our goals. Furthermore, we will benefit from partnerships that will help us bring products to market more quickly and at a lower cost.

Great. A lot has been asked already. I just want to squeeze one more in regarding the strategic pillars you discussed. You mentioned strategic partnerships related to some of the newer aspects of the Cancer Care Continuum. Can you provide a couple of examples of what that might look like, including what type of partner you would seek and how that would evolve? I understand this is more of a long-term vision, but it would be helpful to know how we should approach this and what the potential financial profile might be.

Michael, thank you for your question. I hope we’re not discussing something that’s too distant in the future. Our partnership with PATHOMIQ, which allows us to utilize their AI capabilities alongside our molecular assay for prostate cancer, Prolaris, serves as a good example. In some of the partnerships we are considering, the research and development or product development skills of a partner would be enhanced by our market reach, reputation, and our comprehensive support from ordering to delivery. These relationships can be structured with milestone payments and royalties, and we believe they can help us achieve shared goals in a way that benefits Myriad's financial performance.

Sorry if I missed this, but I did not hear any commentary around Precise Liquid. So could you give us an update on where that product stands and the launch time there? And then sorry to do this, but going back to the LRP, you guys have been making progress on RCM. You called out 49 new coverage policies or expansions year-to-date. Even qualitatively, I know you may not want to talk directly to the growth rates. But how should we be thinking about the mix of ASP gains and volume growth that's kind of built in there?

As for Precise Liquid, we're making a strategic decision that we're likely not going to launch a Precise Liquid product that is based on the assets, if you will, that we acquired last year. Rather, we are excited about being able to serve the liquid biopsy comprehensive genomic profiling opportunity through a partnership. So those will be some of the things that we look forward to being able to share with our customers and all of you in the coming quarters. And Scott, please comment on the second question.

Yes. So in terms of the question around kind of the composition of the LRP, I think what we have communicated in the past was that we thought based on the significant no-pay opportunity that we still have, even after all of the great progress by our revenue cycle and payer markets team, that we thought we could continue to contribute 100 to 200 basis points per year from revenue cycle and payer markets initiatives. Even with the strength that we are seeing this year, and we are very excited about it, particularly when it comes to kind of the progressive position many payers and LBMs also are taking in terms of coverage for expanded carrier screening, even with that, I don't think we'd be ready yet to move off of that longer-term expectation around 100 to 200 basis points.

All right. Thanks, Gigi, and this concludes our earnings call. A replay will be available via webcast on our website for 1 week. Thank you again for participating and have a good rest of the afternoon.

This concludes today's conference call. Thank you for participating. You may now disconnect.