Prashant Kota

Prashant Kota of Goldman Sachs inquired about CareDx's strategy for converting existing customers to multi-solution accounts and the potential impact of new pediatric and simultaneous transplant tests on ASP and gross margins.

Answer

CEO John Hanna highlighted the focus on synergistic digital tools like XynQAPI for the IOTA program and a new medication therapy management program to drive AlloSure adoption. He stated that the new pediatric and simultaneous transplant tests are for smaller, high-acuity indications and are not expected to negatively impact 2025 gross margins, as they anticipate consistent payment with existing commercial claims.

Representing Matt Sykes, Prashant Kota asked about the drivers behind the 51% improvement in the Gartner Productivity Index for clinical services and inquired about the reasons some providers might resist NGS-based testing.

Answer

CCO Warren Stone attributed the productivity gains to systematically addressing inefficiencies through investments in back-office resources, new systems, and a standardized sales process. Chief Medical Officer Dr. Nathan Montgomery explained that resistance to NGS is decreasing as it becomes standard in guidelines, with remaining barriers typically related to specific cost concerns or rare cases where a focused assay offers a sensitivity benefit.

Prashant Kota from Goldman Sachs asked if Myriad would consider staggering new product launches to avoid margin dilution from initial 'no-pay' rates and whether the company is confident in its 12%+ long-term growth target if MRD revenue takes longer than expected to materialize.

Answer

President and CEO Paul Diaz acknowledged that new products like FirstGene and Precise Liquid will initially have 'no-pay' volume and potential margin impact, but the company's goal is to close the gap between launch and payment. He affirmed that the long-term growth target is based on the core portfolio, with new products like MRD expected to push growth toward the mid-teens in 2026 and beyond, not to achieve the initial 12% target.