Myriad Genetics Inc

NASDAQ:MYGN

Earnings Call Transcript 2023-Q1

[Matthew Scalo, executive]

Okay. Good afternoon, and welcome to the Myriad Genetics First Quarter 2023 Earnings Call. During the call, we will review the financial results we released today, and afterwards, we will host a question-and-answer 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, Senior Vice President of Investor Relations. And on the call with me today are Paul Diaz, our President and Chief Executive Officer; Bryan Riggsbee, our Chief Financial Officer; Nicole Lambert, our Chief Operating Officer; and Mark Verratti, our Chief Commercial 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 Securities and Exchange Commission, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

With that, I will now turn the call over to Paul.

[Paul Diaz, executive]

Good afternoon, everyone, and thank you for joining us. On today's call, we will discuss highlights for the first quarter and provide updates on the strategic initiatives that are driving our long-term growth plan.

So many positive changes happening across our organization. I want to take a minute to thank our Myriad teammates and our provider partners for their continued commitment to advancing our mission and vision to make genetic testing and precision medicine more accessible, helping people take more control of their health and to enable providers to better treat and prevent disease.

Turning to Slide 4. Myriad Genetics had another strong quarter as we kicked off 2023 ahead of expectations. Total revenue grew 10% year-over-year, driven by another strong quarter of double-digit volume growth in both MyRisk Hereditary Cancer Testing and GeneSight. Total volumes grew 21% year-over-year and 10% sequentially, excluding SneakPeek. Hereditary cancer testing volumes grew an impressive 24% year-over-year in Q1 after growing 16% year-over-year last quarter.

For those who may have doubted our ability to sustain GeneSight growth, we processed 110,000 tests in the first quarter, a company record, and saw approximately 4,000 new clinicians ordering GeneSight for the first time. We're also very excited about the progress we made in our prenatal business, which despite some interruptions in the State of California, grew test volumes 12% year-over-year in the quarter, excluding contributions from Gateway Genomics.

This quarter gives us confidence in our ability to achieve our full year financial guidance as well as reach profitability and positive operating cash flow in the fourth quarter of this year. Additionally, we believe that our continued commercial execution, robust product pipeline and top-tier talent will fuel our long-term growth even further. In the quarter, we announced several new exciting strategic partnerships, including an expanded partnership with Illumina to combine our unique diagnostic development and commercial capabilities, to expand our emerging biopharma business and broaden access to HRD testing in the United States.

We also announced a new collaboration with SimonMed Imaging, one of the largest independent outpatient imaging providers in the United States, to improve access to our MyRisk Hereditary Cancer Test with RiskScore for women of all ancestries. Nicole will speak to these new partnerships in more detail, and we are excited about a number of other similar business development opportunities under discussion.

At Myriad Genetics, we strive to provide best-in-class quality tests and scientific insights for our providers and their patients. From leading research and development in molecular and companion diagnostics, to products helping to address our growing mental health crisis, we are working at the forefront of innovation in our space.

We also want to ensure that we are actively removing friction points for our patients and health care providers to make it easier to do business with. Nicole will talk about some of the progress we've made in improving the patient and provider experience with new tools like our unified order portal and EMR integrations later on this call.

Finally, improving access to our tests for patients of all demographics is extremely important to us. Serving underrepresented populations and ethnicities through our patient outreach programs has proven to be very effective, and we are excited about our new point-of-care financial accessibility tools and payment programs to improve access for all patients.

Transitioning to Slide 6, I'd like to outline exactly why we think and what it takes to be a winner in our sector. First, we strive to have the best science and products whose access and adoption are enabled by technology in our field. For us, this means having products that deliver real-world results in clinical settings through high-quality, actionable and differentiated tests that help support early detection and treatment decisions.

Second, we believe we need automated, scalable and cost-effective lab operations to deliver on our mission. Our Lab of the Future strategy, which Nicole will discuss later in the call, allows us to improve workflows, test turnaround times, and reduce costs through advanced technology and automation.

Similarly, the investments we've made over the last 2 years in modernizing our IT platform allow us to better serve our patients and provider partners at scale across all products and channels at lower costs.

Third, a strong commercial platform ensures that our providers and patients benefit from partnering with Myriad Genetics and that we can grow efficiently.

And finally, to win, one needs best-in-class regulatory revenues and revenue cycle capabilities. Great science used to develop practical high-quality diagnostic tests, operating state-of-the-art facilities that reduce costs with the ability to get paid for our efforts is key.

Our payer markets team has deep industry experience and plays an integral role in the development of our product pipeline, as well as our commercial reimbursement strategies. We see this as a competitive management that does not often receive the credit it deserves.

With that, I'll turn it over to our Chief Commercial Officer, Mark Verratti, to speak towards our commercial capabilities in more detail.

[Mark Verratti, executive]

Thanks, Paul. I'd like to start on Slide 8 and talk about our commercial team. We have made tremendous strides in our commercial execution over the past year, with changes made across the organization that have enabled our sales force to effectively target and penetrate both new and existing accounts. The results speak for themselves, with robust volume growth over the past 2 quarters, the vast majority of which come from existing accounts.

This gives us confidence in the changes that we have made in the commercial team, because growth in existing accounts means that tailwinds like market dislocation have, to date, not been the key drivers of our commercial performance.

What is driving our continued volume growth is our skilled and focused sales force, with years of experience at Myriad working alongside providers and their patients, equipped with new digital tools and scientific insights that help them better serve our customers while simultaneously attracting new accounts to the franchise. Our sales force is motivated by these new capabilities because it makes their jobs easier, which is why we see turnover across our entire sales force drop down below 8%, something that we are incredibly proud of.

I'll now turn to Slide 9 and talk about our core business units. Our Oncology business delivered $77.6 million in revenue in the first quarter. Reported test volumes were roughly 50,000.

Prolaris, our market-leading prostate cancer test, continues to reach patients with diagnosed prostate cancer to provide them and their physicians with important information needed for better treatment decisions.

In the first quarter, Prolaris volumes grew 22% year-over-year after growing 17% year-over-year in the fourth quarter of 2022. Prolaris is the only test with 2 validated thresholds at the time of diagnosis: one, to identify which patients can safely go on active surveillance; and the other, to identify which patients need multimodal therapy who can safely avoid additional therapies like hormone therapy. In fact, third-party research shows that Prolaris, using active surveillance threshold, identified almost twice as many patients who can safely go on active surveillance compared to our peers.

Prolaris is not the only highlight in the quarter for Oncology business. Hereditary cancer testing volume in Oncology grew 16% in the quarter year-over-year, and we added a number of experienced leaders to the group to help drive growth even further, with improved operational efficiencies like 15% reduction in turnaround times for our oncology test compared to Q1 of last year. Along with a Net Promoter Score of 73% amongst oncology providers and a fully equipped sales force, we anticipate continued growth from our core oncology tests.

Now I'll move to Women's Health on Slide 10. The Myriad Genetics Women's Health business serves women of all ancestries by assessing the risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family.

In the quarter, hereditary cancer testing volumes in Women's Health increased 32% year-over-year, making 3 consecutive quarters of positive volume growth. The strong momentum reflects a combination of deeper penetration of current accounts, new customer wins and ongoing gains in addressing unaffected patients with a family history of cancer.

We are also excited to announce that we have launched our unified ordering portal for the Women's Health business in the quarter to simplify the ordering process for our customers, especially for those ordering more than one Myriad product. We plan on converting all existing Myriad Women's Health customers to our new unified ordering portal by the end of the year.

In prenatal, we are pleased to report a 12% increase in quarterly test volumes compared to Q1 of last year. This figure excludes any contributions from our recent acquisition, Gateway Genomics, and features minimal contributions from the State of California due to ongoing disruption caused by the state's revised prenatal screening program. We are very excited about this growth and look forward to continued strong performance.

Let's move now to Slide 11 and talk about Mental Health and GeneSight. Mental illness continues to have a lasting effect on patients and their families in the U.S., as those suffering fail to receive proper medical treatment. GeneSight helps physicians better understand how antidepressants and other drugs will affect their patients. Importantly, for this patient group, a test can be performed, which is a single cheek swab sample that can be taken in the privacy of their own home.

In the first quarter, GeneSight volumes grew 31% over the prior year as we've added approximately 4,000 new clinicians to the franchise, bringing Myriad to more than 26,000 active ordering physicians for the GeneSight test. We believe that the ongoing success of GeneSight further demonstrates the effectiveness of our new commercial capabilities, digital marketing strategies and patient-centric engagement initiatives implemented over the past year.

On that note, I want to turn to Slide 12 and talk about our digital platform. I've spoken about our digital capabilities before, primarily as it relates to GeneSight, and I'll give another shout-out to the GeneSight team for the success they've seen in developing these capabilities and transferring them to other parts of the business, specifically in Women's Health and urology.

Now let's look at this funnel, which should help visualize some of the examples of these digital capabilities. As you can see last year, we increased our total website traffic by over 10%. And more importantly, we've learned how to convert that traffic into greater qualified leads. In other words, we've learned how to connect people who need GeneSight to our website. In 2022, we increased the number of qualified leads from website traffic by more than 50% compared to 2021 for both patients and health care providers.

Then our inside sales, outside sales and marketing teams, equipped with new digital tools and automation technologies, are better able to convert those leads into actual orders. In 2022, we increased the number of leads converted to ordered tests by more than 30% compared to 2021. These results are outstanding, and I just want to thank the team again for doing such a great job developing and executing on this digital platform. As we look to 2023, we plan to leverage these proven digital capabilities and drive growth even further.

I'll now pass the call over to our Chief Operating Officer, Nicole Lambert, to talk about our products and key initiatives.

[Nicole Lambert, executive]

Thanks, Mark. I'd like to start on Slide 14 and speak about our products and priorities for 2023. While we have a full pipeline of new products in development, we want to make clear that our priorities for 2023 is to maximize the full potential of our current products with MyRisk, GeneSight, Prequel, Foresight, myChoice CDx, Precise Tumor and Prolaris.

Our strong and consistent performance, particularly over the last 6 months, is credited to the success of these core products, and our general organizational improvements made over the last 2 years have enabled us to focus on the markets where we have a right to win.

Our core products are well supported by guidelines set by organizations such as NCCN and are widely viewed as standard of care. We are excited about ACMG's support of expanded carrier screening and look forward to any further announcements and support from ACOG that may follow suit.

Because they are our key drivers of growth, we continue to prioritize and invest in our core products. So while we are very excited about our new product launches, we believe that it is important to focus on areas where we can take action and win now, given the low adoption rates in the competitive environment.

On the next slide, I'll speak more about our operational initiatives. Myriad's operational initiatives aim at improving the customer experience and creating an environment of innovation. We talk a lot about making it easier to do business with Myriad Genetics. This means listening to our patients and providers and taking actions to address their concerns and adapt, however we can.

Recently, we added more genes to our primary MyRisk test and announced a partnerships with ClinVar because our providers asked us to. Not only have providers responded positively to changes like these, but they know that we are listening to them and we want to hear from them.

We are pleased with the ongoing rollout of our new unified provider portal and our unified order management system, which not only ensure that we are getting the information required by payers, but they also make it much easier for providers to order our tests for their patients. It reduces the number of times we need to recontact our providers for this information.

Our EMR integrations with the likes of EPIC and others not only ensure that we are getting patient medical records from providers, but it also means that providers who are already in those EMR systems do not have to provide those documents to us outside of their normal workflow.

On the next slide, we can see the tremendous progress that we have made working with clinics using EMR integrations to deliver more test results for our MyRisk Hereditary Cancer Test. In January, we launched our new unified provider portal in Women's Health, and we are already seeing tremendous uptake from providers. We plan to convert all existing Myriad Women's Health customers to our new unified portal in the very near term.

With that, let's turn to Slide 17 and talk about our updates to Lab of the Future. Preparation for our new Lab of the Future are on track at both new facilities, one in West Salt Lake City and our new headquarters and central lab operations, and the other in South San Francisco, the Walter Gilbert Research and Innovation Center, which is named after one of our Nobel Prize-winning founders, Walter Gilbert, are both ready for move-in this June. In addition, we are taking steps to exit our current headquarters building in Salt Lake and are moving lab equipment to our new headquarters as we speak.

These new facilities not only create a more cost-effective approach to running our tests, but they foster an environment of innovation and collaboration amongst our commercial, support and scientific teams.

Next, on Slide 18, I'll talk more in depth about some strategic partnerships that we made in the quarter. As Paul mentioned, we announced several new and exciting strategic partnerships this quarter, including an expanded partnership with Illumina and a collaboration with SimonMed Imaging. As such, Illumina's TSO 500 HRD test is now available in the U.S. for research only, and the unique companion diagnostic alliance has been established to enable more clinical research for gene-based targeted therapies. We look forward to working more closely with Illumina to broaden access to HRD testing in the United States.

We are equally excited about our new collaboration with SimonMed Imaging, one of the largest independent outpatient medical imaging providers in the U.S. Together, we plan to launch a new hereditary cancer risk assessment program that combines diagnostics imaging with genetic risk assessment utilizing MyRisk with RiskScore to enable affordable access to genetic testing and deliver a personalized insight to better inform clinical care for millions of patients served at SimonMed.

I'll now turn the call over to Bryan to discuss financial highlights in the quarter.

[R. Riggsbee, executive]

Thanks, Nicole. I'd like to start by reviewing product volume trends on Slide 20. We generated strong double-digit growth in both hereditary cancer testing and GeneSight volumes in the first quarter. Prolaris saw an impressive 22% quarterly volume growth figure compared to Q1 of last year. And prenatal volumes, excluding contributions from SneakPeek, grew 12% year-over-year. Total first quarter volumes grew organically 21% over last year. Overall, the quarter reflected really positive broad-based volume growth across the portfolio.

Turning to first quarter total revenue. We generated $181.2 million in revenue or 10% growth over the year ago period, the second consecutive quarter of double-digit growth in total revenue. This growth rate reflects strong volume growth, which was partially offset by product mix and a challenging year-over-year comparison related to out-of-period cash collections.

Recall that first quarter 2022 benefited from approximately $12 million in positive out-of-period adjustments, which were immaterial in the first quarter of 2023. In addition, SneakPeek's price point creates significant product mix impact. Taking these factors into consideration, underlying ASPs were in line with our long-term forecasted range of negative 3% to 5%.

Healthy growth across our business units reflect a number of comments Paul, Mark and Nicole have already mentioned, including improved execution by a strengthened and highly motivated commercial team, as well as investments in core infrastructure and improving customer experience.

First quarter total adjusted operating expense of $144.5 million, while above our prior commentary, reflects higher than forecasted performance-based commissions and the timing of certain sales and marketing costs. We remain confident that these investments will continue to support our growth story and generate long-term shareholder value.

We'll turn to Slide 21 now to review our financial guidance. We are updating our 2023 guidance to reflect the strong Q1 performance. We are raising the low end of our revenue range by $10 million, yielding a range of $730 million to $750 million, or 8% to 11% growth over 2022. Gross margin for 2023 remains unchanged at between 68% and 70% and is expected to fluctuate in [ any ] quarter given seasonality.

While our first quarter adjusted OpEx spend was higher than anticipated, it is aligned with our revenue outperformance in the quarter. We are raising our 2023 adjusted OpEx guidance by $5 million to a range of $535 million to $555 million. We anticipate quarterly adjusted OpEx to decrease on a nominal dollar basis through the remainder of the year. This will be accomplished through tighter cost controls across the organization and reflect some programs sunsetting throughout the year, including certain sales and marketing expenses that were incurred in the first quarter.

Net-net, we are narrowing our 2023 non-GAAP EPS loss range to $0.24 to $0.36, with the midpoint unchanged. In addition, we reiterate our previously disclosed target of generating positive adjusted operating cash flow and profitability in the fourth quarter.

Moving on in terms of the balance sheet. We ended the quarter with $109 million of cash, no debt, and continue to assess our capital position in the context of our overall forecast to be profitable and generate adjusted operating cash flow by Q4. Our existing credit facility expires July 31, and we intend to replace it with a secure -- a new secured credit facility to provide additional financial flexibility.

Note that Q1 in the first half of 2023 reflects an elevated level of capital expenditures associated with ongoing progress in our Labs of the Future strategy and facility build-out that Nicole reviewed. We expect CapEx to return to a more normal level in the second half of the year as these build-outs of these facilities is completed.

I'll now turn it back over to Paul for closing remarks on the next slide.

[Paul Diaz, executive]

Thanks, Bryan. As you've heard, we have a lot of exciting organizational change that is happening, but we remain focused and confident on reaching profitability in the fourth quarter of this year. Balancing growth and innovation while keeping an eye on profitability is an ongoing challenge and opportunity, but one we are committed to.

In closing, I'd like to offer what we believe are our strength and strategic advantages. First, we continue to grow volumes consistently every quarter across our businesses and we know how to get paid for our tests. Second, pricing for our products remains stable, and we have visibility into pricing moving forward. Third, we have a disciplined cost management structure, as we expect to maintain our strong gross margins and manage our OpEx responsibly.

Fourth, we are committed to effective capital deployment in key areas that will provide the customer experience, including new technical -- technology tools and capabilities, innovation, commercial strength and our Lab of the Future to generate strong returns for our shareholders. Fifth and finally, our growth catalysts are clear as we continue to elevate our products to their full potential and opportunistically look for tuck-in acquisitions like Gateway Genomics transactions.

All of this reinforcing our position as a trusted, differentiated lab with specialized expertise, best-in-class quality, a strong, scalable commercial engine, underpinned by data, research and technology with industry-leading margins and business management.

I also want to point out what a great job our teams have done in listening to our patients and providers. We have re-approached the way we engage with customers and they are starting to notice.

A great example of this, as Nicole spoke to, is our open source data strategy with ClinVar, which is something that the genetic cancer community is quite vocal about.

Keeping patients and providers at the center of everything we do is starting to pay dividends, and we are excited about finding new ways to make it easier to do business with us, everything from increased price transparency and affordability for patients to the rollout of initiatives like EMR integrations with EPIC and our unified order portal, along with improvement to Myriad Complete, our customized suite of services and workflow solutions.

With that, I'll turn it back to Matt for Q&A.

[Matthew Scalo, executive]

Okay. Thanks, Paul. 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 are ready to begin the Q&A session. To ensure broad participation, we are asking participants to please ask only one question and one follow-up.

Operator, we are now ready for the Q&A portion of the call.

[Operator]

[Operator Instructions] Your first question will come from the line of Andrew Cooper with Raymond James.

[Andrew Cooper, analyst]

Congrats on a nice quarter here on the top line. Maybe just first, you didn't really necessarily touch in much depth on it in the call, so I just want to make sure, in terms of time lines of some of the pipeline, what's working through, that everything is on track or if there's any updates to the different pieces of Precise as well as FirstGene and the rollout of some of these additional tests.

[Paul Diaz, executive]

Yes. Andrew, we continue to look at our product management across the portfolio, including the new product launches. And so to enhance the current products, we don't see any material changes in our time line. We still expect to launch FirstGene softly in Q4. What exactly that looks like, we have some enhancements to Foresight that we want to do in anticipation of expanded ACOG guidelines. So there, we've really instituted a product management approach across our current portfolio and the new product launches.

And so for example, we're learning and our new oncology team is working on the Precise rollout, and we want to make sure that we've improved upon that before we roll out Precise Liquid. And as we've talked a little bit about, our biopharma business is really taking off, and that bodes well for the interest that we've seen in Precise MRD on the research side.

So again, I think enhancements to Foresight will improve the FirstGene launch, and it's foundational to that. But we don't have any material changes at all to kind of the pipeline or the timing that we're looking at this point.

[Andrew Cooper, analyst]

Okay, great. That's super helpful. And then maybe secondly, maybe for Bryan or Paul, whoever kind of wants to answer it, but just a little bit more color on the OpEx increase. I think one of the questions investors have had has been on the ability to do some of these things without incrementally more spend. So just -- how much -- can you give us a little bit more color on what that is? And then how much of the sunsetting that was mentioned and things like that was already planned through the year versus things that are coming in, in an attempt to offset higher costs elsewhere? Just a little bit of kind of explanation or color around that would be super helpful.

[R. Riggsbee, executive]

Yes. Thanks, Andrew. I think first of all, the -- as we said, the Q1 had some incremental costs, especially as it relates to some of the selling functions, given the significantly -- the step-up in volume from Q4 to Q1. There were some costs that went along with that. Obviously, we came in, as you noted, much higher on the revenue line.

Our plans for the year had always sort of been for some of the projects and initiatives that we had earlier in the year to start to sunset as we move through the year. And so we continue to not only expect that, but to also expect some of the cost control programs that we've put in place to have an impact through the year. And that's how we get to the update in our guidance.

[Paul Diaz, executive]

Yes. And Andrew, I just want to reiterate, we had sales and marketing expenses, commissions that helped drive a lot of the growth that will sunset, some of which was the way that commissions were budgeted, quite frankly. Given seasonality, we expected volumes to be down, not up to the level they were.

And -- but more importantly, to the other underlying question, the OpEx budget here reflects all of the investments that we anticipate that will be necessary to launch FirstGene, to advance clinical validation work for MRD and to keep everything else on track that you asked about before. So investors should be confident that there won't be any surprises in the OpEx in terms of new product launches. In fact, it's all about scaling new products on the current commercial infrastructure and leveraging that. So that's what investors should count on.

[Andrew Cooper, analyst]

Great. Yes, new product or new comp bogeys is a high-class problem to have to deal with. So I appreciate it.

[Operator]

Your next question comes from the line of Dave Delahunt with Goldman Sachs.

[David Delahunt, analyst]

Congrats on the quarter. On the EPIC EMR integration, could you tell us a bit more about how you measure the productivity increase you expect there?

[Nicole Lambert, executive]

Yes. Thanks for the question. Really, we're looking at those accounts and to say some of them are existing accounts for us to see, okay, if we make the process that much easier, what's the lift that we should expect in each of those accounts. And we're seeing a fairly wide variability. In some clinics, the workflow just isn't all that established and so the volume stays flat. But in a lot of these clinics, the clinical buy-in is already there. The physician already believes in the product. It's just a matter of making it that much easier for the staff.

And so we look -- in the early days, we look at those, right, like customers that we already have with the uplift that we can see. But I think the real power of that EPIC agreement is, in those clinics where we didn't already have existing customers, we can get new customers based on the ease of which they can order and how we can just bring in a sales force to enforce the clinical utility and the value of our products. And then the uplift will be a lot faster in those clinics. So I would say we're measuring sort of new customers and speed to getting up to full potential, and then what's the lift in existing customers.

[Paul Diaz, executive]

So what -- just to add, what we have seen in the various EMR integrations, as Nicole spoke to, is about a 25% lift in volumes and wallet share. And I just want to reiterate that most of these solutions did not drive fourth quarter and Q1 results. Most of these solutions are coming into place now. So it really gives us a lot of confidence in our ability to grow, as we've stated over the last year, our ability to grow in '23 and going into '24.

So the other thing that's really an important enhancement here is getting paid, being able to pull medical necessity prior auth out of EPIC or Cerner or the other EMRs that we're working on, just create less friction with the payers as well, and that enables us to reduce our no pay and get paid faster. So there's just a lot of benefits here. And obviously, getting the reports back to the provider more quickly so they can treat the patients. So it's a winner across the board.

[Operator]

And your next question comes from the line of Derik De Bruin with Bank of America.

[Unknown Analyst]

This is John on for Derik. Yes, so congratulations, first of all, strong double-digit growth again this quarter. But I want to make sure -- I wanted to ask how much of that growth is off on perhaps easier comps from prior year due to COVID versus incremental. Like were there any catch-up payments perhaps from the new code going into effect or any onetime items?

[Paul Diaz, executive]

No. As a matter of fact, as Bryan spoke to, we had to overcome the prior $12 million prior period collection, strong collections that we had in Q1 of last year. So clearly, the comps were easier to achieve given Omicron last year.

What I would point you to is the quarter-over-quarter 10% growth that we had sequentially in what is typically a 4% or 5% down quarter. So the momentum in our -- across all our products, MyRisk Hereditary Cancer, prenatal that grew 12% off of low performance last year, really performance across the board. And most of that, as Mark spoke to, coming from wallet share of existing customers,. We're not even seeing yet the flow-through of new customers that are just being onboarded. So we are feeling pretty good about the momentum here in the business.

[Unknown Analyst]

Appreciate that. So that means you still expect GeneSight to grow upwards of 20% for the year. How do you see myChoice and Prolaris and the prenatal products contributing to that growth, if you're able to break down those segments?

[Paul Diaz, executive]

Well, we don't break down those segments. But I think what we've tried to focus everyone's attention on is over the last year, and Nicole spoke to this, it is about mature products with known reimbursement in guidelines where our principal challenge was ease of use with providers, and you're seeing double-digit growth across all the product lines and still pretty low adoption rate.

So when you think about Prolaris, that segment -- that area is only 25% penetrated, same number for hereditary cancer. So when people talk about hereditary cancer being commoditized or some melting ice cube on pricing, it's just not true and we're demonstrating that. And particularly with the 34% growth in Women's Health for unaffected patients with a family history that meet guidelines, the majority of which are 25 to 45, there's just great opportunity for patients to ask MyRisk with RiskScore, which is by far the best hereditary cancer test in the marketplace.

[Operator]

And your next question will come from the line of Jack Meehan with Nephron Research.

[Jack Meehan, analyst]

Bryan, I wanted to ask you about the GeneSight ASP, just how the coding change played out in the quarter? I'm calculating an ASP of about $290, so down 13% sequentially is my math. I know the Medicare rate came down 15%. It was my understanding that was only like 25%, 30% of the volume, though. So can you just talk about what -- is my math right? And what was the remaining driver of the sequential decline?

[R. Riggsbee, executive]

Yes. I mean I think in total, the -- and I look at it sequentially as well. I think that's the right math. What I would say is that over half of that sequential change was really driven by the normal seasonality that we see as long -- as well as a transitory billing issue that we didn't resolve until late in the quarter, and that will play out over the course of the next few quarters. So those 2 items were sort of over half of that change that you saw.

We did see some -- as we said, some downward pressure as it relates to the PLA code, but we still expect that over time, long term, that's going to be a positive to have a code like that, that's unique to GeneSight and recognizes it's transparent for folks as it starts to come in and be a covered service. But that was some portion of it, but the majority were the first 2 items that I mentioned.

[Paul Diaz, executive]

Unless we forget the revenue growth quarter-over-quarter in GeneSight at the end of the day is what we're being judged by here.

[R. Riggsbee, executive]

Yes, year-over-year, [ that's so ].

[Jack Meehan, analyst]

Sure. And then I also wanted to ask just about the DSOs. I think accounts receivable increased $17.5 million sequentially. Last year, it was $10 million. In the prior year, it was $5 million. Just -- maybe this is related to the billing you were referencing, but just like the increase was bigger than in the past. Can you comment on that?

[R. Riggsbee, executive]

Yes. I think, two things. One is when you think about the year-over-year comparison, the revenue was up substantially year-over-year, especially when you back out the out-of-period cash collections out of last year that obviously would not have had an end-of-period AR effect. And March, typically the way the quarter falls is the biggest month of the quarter, and there's not an opportunity to collect that. So I think the way we look at it, DSOs are right in the range that we would have expected. Really, the increase in the AR balance is driven by the increase in revenue.

[Paul Diaz, executive]

And we've seen that 5-day pop and worked it down every year as well. So it's sort of seasonally consistent.

[Operator]

[Operator Instructions] Your next question comes from the line of Puneet Souda with SVB.

[Puneet Souda, analyst]

So on -- was there a research contribution on the MRD side in the quarter? And wondering what's the latest update there in terms of the product launch, and how are you thinking about the market overall with there are some new entrants into the market that are launching the assays prior to reimbursement. And so obviously, the number is growing in the market. So I just wanted to get your latest as to how you're thinking about this market overall.

[Paul Diaz, executive]

Yes. We're still incredibly excited about how we stack up in terms of the MRD assay that we're standing up operationally in our existing labs with the technologies that we have with Prequel and myChoice. There were no MRD revenues in the quarter. As we talked about, that will -- that, we believe, will happen in the back half of the year. A lot of interest, though, and discussions advancing with pharma on research MRD. So we do expect to see some of that go through. And I think that will, no pun intended, validate our assay.

And importantly, in the quarter, we did see some nice growth in our biopharma research business, but it was not an MRD. But those relationships continue to expand. That's led to our companion diagnostics expansion. And again, as Nicole spoke to, we think the Illumina partnership will just open up more of those conversations.

So we have a growing pharma -- biopharma business and are excited about the differentiation of our MRD assay. I would underscore that the differentiation is that when we come to market A, we will generate revenues from research. So we're confident about that. And B, we can stand it up in our labs and commercialize it a lot quicker. So -- and we'll be talking over the next couple of quarters, hopefully, about some of the clinical validation work that we're doing with some academic medical centers, and we hope to be talking about that here in the next several months.

[Puneet Souda, analyst]

Got it. And then on -- as you look for the rest of the year, you acquired SneakPeek later last year. Just wondering in terms of the focus, is it continuing to be on product launches? And once you have trimmed the portfolio a bit, is it time -- opportune time to start looking at more assets in the space? Obviously, the valuations have come down. Just wanted to get your latest thoughts on M&A.

[Paul Diaz, executive]

Yes. I'll answer that question and just give an observation to this sector. And I'm only 2.5 years into this, but the focus on new product launches as opposed to getting the full potential of profitability on products that are leading and that have margin and margin expansion, I scratch my head about, quite frankly.

So we have an exciting product portfolio. We've talked about that contributing to '24 and particularly '25. We're growing at 10% plus based on our existing portfolio, and we see growth on top of that.

In terms of M&A, absolutely, we will continue to look for opportunistic tuck-ins in the areas where we think we can win. But yes, I'm just -- I don't know if -- if I have an investor hat on, I'm really thinking about the opportunity to drive profitability and growth in core mature products where adoption rates are still low and the competitive environment has gotten a lot better.

That's not to say we're not excited about FirstGene, MRD and expanding to Precise Liquid. But we're very focused right now on GeneSight, myChoice, Prolaris, MyRisk in particular. And I guess I'd just underscore that from an investor standpoint and return on invested capital.

[Puneet Souda, analyst]

Got it. Makes sense. And congrats on the solid quarter.

[Operator]

Your next question comes from the line of Mason Carrico with Stephens.

[Jacob Krahenbuhl, analyst]

This is Jacob Krahenbuhl on for Mason. So you guys have talked about the cross-selling opportunity for a number of your tests across channels, whether it's selling GeneSight in the women's health channel, MyRisk into the urology channel. Could you just elaborate on where you've seen the most success so far with that, and what you view as the most attractive opportunity on this front? And sorry if this has been addressed for [indiscernible]?

[Mark Verratti, executive]

Jason, this is Mark speaking. I think as Paul mentioned, we're really in the early innings of that. So I think what you're seeing now is you're seeing the fact that we do have commercial scale across those channels. So most importantly, they're all talking to one another. They're making sure that if a provider does want to get GeneSight, that we make sure that the GeneSight rep that's in the local area can certainly do that.

I think what you're seeing is, through our digital capabilities and as Paul and Nicole talked about, we're now building unified ordering portals to where we're making it easier for providers to be able to do that. And then starting within the women's health field, where we've got MyRisk, we have the prenatal products, and very soon, we'll be able to expand to GeneSight and to our other product lines.

So we're still in the early innings. But as you can imagine, we are seeing different providers from our different segments start to use all of our products across the portfolio.

[Paul Diaz, executive]

And you can maybe just talk about UroSuite, because we just launched that. So these products...

[Mark Verratti, executive]

Yes. So when you think of UroSuite, right, we do have the ability and we're the only company to be able to provide solutions for that provider. And in that case, we already have the capabilities. So I think when you think of UroSuite, when you think of Women's Health, again, with MyRisk as well as prenatal products, we have those types of capabilities. And I think soon you're going to see capabilities to be able to think about GeneSight. The obvious choice that we've talked about previously is GeneSight going into Women's Health segment, and we'll talk more about that in future quarters.

[Jacob Krahenbuhl, analyst]

Okay. That's helpful. And then so next, on hereditary cancer. Hereditary cancer volumes have been a bright spot recently. In terms of the organizational changes and commercial optimizations that you've made within this business, could you maybe speak to what commercial initiatives are still in front of you and what your key priorities are going forward to ensure that you continue to make these market share and wallet share gains we've been seeing more recently?

[Mark Verratti, executive]

Yes, sure. So there's the basic blocking-and-tackling that I talked about last quarter, which is better targeting, better segmentation. I think there's the other pieces that we've talked about around goal setting, commissions, training, right? Those are all sort of the basics, but I think as we've talked about, making us easier to work with.

I think you've heard Nicole today as well as last quarter talk about many customers always like the Myriad products, but for one reason or another, they decided to leave us. Now we're able to go back in there. We've got easier solutions. We've got better pricing. We've just got more options.

And so I think as we look at the targeting across the space, there's driving depth within our existing accounts, which we talked about today, but there's also some of the new customers that we know exist, both large and small. And we'll start to give a little bit more color to that moving forward.

[Operator]

And there are no further questions. I'll turn the call back to Matt Scalo for closing remarks. Thank you.

[Matthew Scalo, executive]

Okay. Thanks, operator. This concludes our earnings call. A replay will be available via webcast on our website for 1 week. Thank you again for joining us this afternoon.

[Paul Diaz, executive]

Thanks, everybody.