Myriad Genetics, Inc. (NASDAQ:MYGN) Q4 2019 Earnings Conference Call - Final Transcript

Aug 13, 2019 • 04:30 pm ET

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Myriad Genetics, Inc. (NASDAQ:MYGN) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Patrick Donnelly

guidance. And then if you can help us kind of size what the upside could be, that would be helpful as well.

Executive
Mark C. Capone

Yeah. Thanks, Patrick. Just to be clear, when we look at UnitedHealthcare, we know that there is going to be three quarters of benefits and the coverage will start October 1. So we have incorporated the upside expectations from UnitedHealthcare into our guidance for this fiscal year. And there's obviously a couple of things to note that also work with that.

One is, of course, as Bryan mentioned, we saw a 15% reduction in revenue in June for GeneSight as a result of discontinuing ADHD and analgesic and that, of course, carries over and also unfortunately impacts volume for UnitedHealthcare as well. The other thing just to note is that we were getting some reimbursement from United prior to this coverage decision. So it's not as if there was no reimbursement. Obviously, now we're getting -- we will get fully reimbursed at the contracted price, but it's not like we were working from no level of the reimbursement. So those are the puts and takes as we approach this benefit of the United coverage.

Analyst
Patrick Donnelly

Okay. And then are you able to just talk through kind of the GeneSight sales force build-out. I know kind of talked about the longer-term plans, what's baked into kind of this next year or so, and what your expectation is in the traction there?

Executive
Mark C. Capone

Yeah. Thanks, Patrick. So just also to be clear, we have not incorporated into guidance any revenue or costs impact of the expanded primary care sales force. As I noted, based on the way we've modeled this, we believe the incremental revenue delivered by that expanded sales team will more than offset the cost. So that would all be upside, obviously, on both the revenue and the earnings line. We're finalizing those plans and would expect to go into more detail on that, but we wanted to give at least a big picture vision of where this will progress over the next year or so.

So just to step back, we have 170 representatives now, and we expect that we will ultimately need 320 representatives and that would cover the largest prescribing primary care physicians. And we'll detail that out in some additional calls in the future. We expect the first wave, we would add 65 of those 150 new additions, and that's the wave that we would expect to do in the second half of this fiscal year. Obviously, then that leaves the next wave or two for fiscal year '21. And so, that's how we're thinking about this expansion. And one of the reasons we won't do everybody at once is we want to make sure that we do this right that anytime you hire that many sales people, you want to make sure they're effective hires and we want to ensure that's the case.

We also want to take advantage of where we have coverage, so