Ladies and gentlemen thank you for standing by. Welcome to the Myriad Genetics Second Fiscal Quarter Earnings Conference Call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator instructions) As a reminder this conference is being recorded, February 3, 2010. I would now like to turn the conference over to Peter Meldrum, President and Chief Executive Officer. Please go ahead, sir.

Thank you. Good afternoon. And welcome to the Myriad Genetics earnings call for our second fiscal quarter ended December 31, 2009. My name is Peter Meldrum and I’m Myriad’s President and CEO. I am joined today by Jim Evans, our Chief Financial Officer; Gregory Critchfield, President of Myriad Genetic Laboratories; and Mark Capone, Chief Operating Officer of Myriad Genetic Laboratories; and our future President of Myriad Genetic Laboratories. I’ll begin discussion this afternoon with a brief review of the past quarter and will be followed by Mr. Evans who will discuss our financial results. Dr. Critchfield and Mr. Capone will review the company’s molecular diagnostic business and sales and marketing initiatives. At the end of the presentation, I will turn the conference call back to the Operator for the question-and-answer period. Please note that some of the information presented here today may contain 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/or adversely from those 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. The documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Before we get into the financial results of the quarter, I’d like to spend a few minutes discussing a management change that was announced today. As mentioned in our news release, Dr. Gregory Critchfield will retire on March 1, 2010 to spend more time with his grandchildren and focus his energies on…

Thank you, Pete. It is my pleasure to present a more detailed look at Myriad’s financial results for our second fiscal quarter ended December 31, 2009. Myriad’s revenues for the quarter of $92.8 million grew by $7.6 million or 9% over our first fiscal quarter of 2010. This improvement was driven by growth in each of the market segments that Myriad addresses. More specifically, on a sequential quarterly basis Myriad experience greater than a 4% increase in revenues derived from our oncology or affected patient population. And more than a 20% increase in revenues from our OB/GYN or asymptomatic population in the second fiscal quarter, as compared to the first fiscal quarter of 2010. Historically Myriad’s December quarter is seasonally the strongest quarter of the year. While we are unable to definitively distinguish how much of the revenue growth this quarter is a seasonal phenomena and how much is attributable to a revival of consumer confidence. During the second fiscal quarter we did see over 2500 new physician customers utilize Myriad’s products for the first time, which we believe is indicative of an expanding customer base. We are also excited by the impact that we have seen to revenues in the DTC territories that have grown above and beyond that which we experienced in other territories. You will hear more from Mark regarding the DTC efforts later in this call. The $92.8 million of revenues for the December quarter comfortably exceeded the Thompson First Call census revenue estimate of $92.2 million. I’m also pleased to report that sample flow continued to be strong through January. Gross margins improved once again to a new all time best of 88%, an increase from 87% in Q1 of this year. We attribute this uptick to improvements in our laboratory processes and to volume…

Thank you, Jim. It is a great pleasure to provide an update for you today on our molecular diagnostics business. The recently completed quarter marks a record in revenues for our molecular diagnostics business. This growth was achieved in part, by the marketing initiatives that we instituted last August. As Mark will be speaking in greater detail about these activities a little later on, I would like to focus on some of the intermediate and longer term opportunities in the exciting field of molecular diagnostics, an important part of our strategy is to generate clinical data that support our products. I am going to discuss some of our recent clinical research efforts for two of our products OnDose and BRACAnalysis. I will conclude with some remarks on Myriad’s products pipeline. Myriad has been supporting clinical studies for its newest personalized medicine product OnDose. OnDose launched last spring provides the oncologist with a measurement of chemotherapy exposure to the important drug 5-Fluorouracil or 5-FU. OnDose gives the oncologist a measurement of how much 5-FU’s a patient is exposed during a 5-FU infusion, providing a target to help optimize the amount of drug that each patient receives. On January 24, 2010, Myriad presented a poster at the American Society of Clinical Oncology Seventh Annual Gastrointestinal Cancer Symposium held in Orlando. We presented data on 150 U.S. patients receiving FOLFOX-6 with or without Avastin to treat colorectal cancer. FOLFOX-6 is the most common protocol for treating colorectal cancer in the U.S., consisting of folinic acid, 5-fluorouracil as the backbone drug and oxaliplatin. We demonstrated that 81% of U.S. patients had suboptimal drug exposure when dosed according to traditional body surface area or BSA protocols. 28.7% of these U.S. patients had elevated exposure to the drug and 52.6% had low exposure to the drug.…

Thank you, Greg. Before I begin, I want to thank you for your leadership and coaching over the past seven years. Your vision, passion, integrity and wisdom have been instrumental in the success of Myriad and in my personal career. You are leaving behind a legacy that has positioned Myriad as a leader in the revolution that is taking place in medicine. On behalf of everyone at Myriad Genetic Laboratories we wish you much continued success. Now it is my pleasure to provide some additional detail on the progress we have made on the enhanced sales and marketing initiatives that we launched during the first quarter of this year. I’m pleased to say that each of these activities is starting to contribute to our revenue growth in both the oncology and women’s health segments. First, we accelerated the hiring of our new women’s health account executives completing the addition of 50 new representatives by the end of August. This is the third consecutive year that we have expanded our women’s health team, each year implementing new strategies to increase the adoption curves in these territories. In addition, this is the first year where we split existing territories to further increase penetration. I’m pleased to say that the adoption rates in both these new and split territories are 30% higher than previous years. The split territories are showing adoption rates similar to new territories, which valid dates the opportunity to even further penetrate the women’s health market. As a result, during the second quarter, we increased our OB/GYN customer base by 25% over the first quarter. Historically, new territories have achieved breakeven revenue in six to nine months and we believe we are on track to meet or exceed those time lines. The second initiative is our direct-to-consumer campaign. In mid-August…

Thank you, Mark. And I will turn the call back to the Operator for the question-and-answer period.

Thank you. (Operator instructions) Our first question comes from the line of Ian Sanderson with Cowen. Please go ahead.

Good afternoon. Thanks for taking the question. First, if I could ask Pete to repeat what you had said about returning, plans to return cash to shareholders. Are there specific plans in place to start paying a dividend or implement a share repurchase program? And secondly, can you provide any color about around sample demand seen in the first weeks of this year?

Thank you, Ian. Myriad has been investigating the most appropriate use of the cash we generate. The company is very fortunate in that, it has a very strong cash generating capability, as I mentioned, $40 million this past quarter. Our first priority for the use of cash is to reinvest it in the company in terms of infrastructure and our product pipeline, research and development activities as well. We also have a very strong focus on end licensing products and to take a very aggressive look at moving the company to Europe within the next three years. And that will certainly consume cash whether it’s an acquisition in Europe or building facilities in Europe from scratch. But as I alluded to on the call, we’re probably generating more cash than the company can wisely spend on internal programs. So the company has been in discussions internally with our investment bankers and we will be discussing at the board level whether or not it would be appropriate to explore other ways of giving cash back to the shareholders and the two main ways I mentioned on the call would be payment of a cash dividend or a stock repurchase program. I would not anticipate any of those being implemented in this fiscal year but we definitely will be seriously considering both of those options in the next fiscal year beginning July 1, 2010. And let me ask Jim to comment briefly on sample flow.

Yeah. So as I mentioned earlier, sample flows remain strong through January and I’m optimistic about this quarter. It’s still too early to the comment on the strength of the entire quarter. As historically we have encountered a couple of challenges in our third fiscal quarter. First, we’ve had the impact of the Christmas New Year holidays. Samples that would have been received during the holiday period, given our seven to 10-day turnaround time would typically be reported out in early January. So the lower number of samples received during the holidays ends up impacting the March quarter revenues. We also see a resetting of insurance deductibles at the beginning of the calendar year that could cause patients to push off testing until those deductibles have been met. But even with these challenges, I believe that Myriad has taken the necessary steps through our marketing and sales initiatives to assure that the company has once again embarked on a period of sustained revenue growth, so we are optimistic about this quarter but it’s still way early to be able to say much definitively on it.

Thank you very much.

Our next question comes from the line of Geoff Meacham from J.P. Morgan. Please go ahead.

Hey, guys. Thanks for taking the question. Greg, congrats on the retirement. Hope you find some time to race cars alongside, yeah.

Thanks, Geoff.

And question for you just on the sequential trends. I’m wondering if you can go in a little bit more detail about the, you know, the trends for the quarter. Is there any way to tease out demand from healthcare spending accounts at year-end versus DTC and then what can you tell us about the geographic differences in volume between DTC regions and all others, with as much specificity as you can?

Either Greg or Mark, if you’d like to take that question.

Sure. I’m happy to. This is Mark. Let me take the first or the second question first, Geoff. As far as geographic differences, we track very closely the samples coming in, as well as, revenue reported from DTC areas relative to the rest of the nation, which we use as an ongoing control. We have seen significant increases in samples from those DTC areas relative to that national control and the increases consistent with the double-digit hurdle rate that we would expect to see and consistent with what we have seen historically in the previous two years. So that sequential difference or so that difference, I think has caused us to be very positive towards this campaign because it appears as the other ones have as well. I think your first question had to do with sequential trends. Is that right, Geoff?

Yeah. More or less, I think, last fiscal -- this time last year you guys had a big benefit from demand from healthcare spending accounts at the end of the year, I’m wondering if there’s any way that you can kind of talk to how that impacted the quarter versus how you think DTC impacted the quarter because the healthcare spending trends are…

Yes. Yeah. This is Greg. Let me jump in on that, Geoff. The health savings accounts are helpful but they are not, they are clearly not the full force that’s play at the end of a quarter and part of that is that people put in a certain amount at the beginning of the year and they can draw from it through the year to offset expenditures that may not be covered fully by their health plans. One other things that I think happened during this quarter and we don’t have any way of substantiating that, but it is -- but in fact people put less money in seeing the economy souring, seeing the prospects of unemployment, they weren’t willing to take money and put it in as much and I think that’s clearly a -- is a clear trend that we believe is there. We don’t have visibility in what people are using to offset things. What Jim said, though, is that the relative proportion of spend by an insurance company versus individuals has stayed relatively the same even through the worsening recession. So the out-of-pocket expense that people are paying appears to be the same fraction of payment that we saw before the recession really turned south.

Okay. Thanks a lot. That’s helpful.

Our next question comes from the line of Amanda Murphy with William Blair. Please go ahead.

Hi. Thanks. Just a question. It seems that most physicians are aware of the test, so I’m just curious as you’re out in the field talking to docs, what is it specifically that converts physician to a new ordering doctor?

Thank you, Amanda. And I’ll ask Mark Capone to handle that one.

Sure. Thank you, Amanda. I think for most physicians the key piece of information that they need is to understand how this test is going to change the medical management for their specific patient, while they are aware of the tests, they may not be aware of the details of changes in medical management and once they do become aware of those differences, normally that’s enough for them to recognize that managing the patient is it’s crucial to have this information to manage that patient. I think those are -- that’s probably the first and foremost. Once they understand that, then they may have questions about logistics, they may have questions about healthcare insurance, they may have questions about discrimination, all of which are readily handled with some of the latest information that we have. So it’s typically that medical management question that gets them over that first hurdle.

Okay. Thanks a lot.

Our next question comes from the line of Charles Duncan with JMP Securities. Please go ahead.

Hi, guys. Thanks for taking the question and congratulations on a nice turnaround in the quarter. My question was on the DTC traction that you’re seeing, do you believe it’s sustainable, perhaps you could give us some color on the number of docs that are using the tests more very broadly across your practice or do you think there’s upside in that and where do you think the next DTC will be done and when?

Thank you, Charles. And I’ll talk a little bit about answering your question then I’ll ask Mark Capone to provide greater detail. The campaigns thus far, particularly the one in the Midwest have been tracking very close to what we’ve seen in the northeast campaign and the prior south campaign. So we do think that the benefits we are seeing are sustainable since they certainly were sustainable from the campaigns that we had done in the previous two years. Mark?

Yes. I would agree. In fact, historically in the previous two campaigns the benefit we saw in the third quarter equaled what we had seen in the second quarter and we don’t see any reason to expect anything different from this campaign. All the signals look to be the same. To your other point, the -- what we did see is 25% increase in the number of OB/GYN customers in Q2 relative to Q1. Again, we saw much of this to occur in those areas where the DTC campaign was occurring and we would anticipate that to continue through Q3 as well.

And Charles, to finally wrap up your question. The three regions that have not yet benefited from a direct-to-consumer marketing campaign would be the California region, the mid-Atlantic region and the northwest region, and so it’s likely to be one of those three regions that we move in next fiscal year.

Thanks for the added color.

Our next question comes from the line of Bill Quirk with Piper Jaffray. Please go ahead.

Yeah. Thanks, guys. And congrats on the quarter. First off, appreciate the color around BRACAnalysis, I was hoping, could you give us a little color to the performance of some of the other tests and I guess, I’m thinking about the products that have been on the menu for sometime, as well as, some of the new ones, such as Prezeon and OnDose?

Thank you, Bill. We have seen good sample flow from essentially all of the company products so it hasn’t been restricted to BRACAnalysis. This past quarter, again, COLARIS was our fastest growing product and has been our fastest growing product for the past several years. The company is very excited about Prezeon. Prezeon represents the largest market potential of any of our products including BRACAnalysis. But I have cautioned investors that we need to do additional clinical validation before Prezeon can be used to its full potential. So Prezeon revenues are small and until we have additional clinical data, we don’t anticipate large revenue contributions from Prezeon. OnDose is probably the product that I’m most excited about. I think the clinical data showing patients who used OnDose versus the body surface area standard of care lived in the Gamelin study six months longer. That’s better than the drug Avastin, for example, just giving the patient the right optimal dose, and the toxicity was half that of patients using traditional body surface area dosing. So we are very excited about OnDose and we are actually going to have Dr. Edward Chu, who is probably the leading expert in terms of treatment of colorectal cancer patients with 5-FU speak at Myriad’s Investor Conference on March 3rd, and he’ll talk in greater detail about the clinical benefit of OnDose but that certainly is a product that I think will be making great contributions to Myriad’s revenue growth in the near-term.

Appreciate the color, Pete. Quick follow-up on Prezeon, if I may. Do you see yourselves altering the tests at all to chase after more of a pathway approach for your EGFR, do you think that PTEN by itself can really achieve some of these opportunities that you’ve thrown out there?

It’s an excellent question, Bill. I do think there’s going to be more of a pathway component with one exception. There are a number of pharmaceutical companies today that are developing drugs in the PTEN pathway for which PTEN would be a companion diagnostic, very similar to BRACAnalysis being a companion diagnostic for the new PARP inhibitors that are being developed. In that case it would be PTEN by itself In other areas, particularly with existing drugs such as Herceptin, PTEN likely would be combined with HER2 new and for the EGFR inhibitors like Vectibix and Erbitux it likely would be combined by KRAS. Both HER2 and KRAS are publicly available, so that would be easy to incorporate in a Myriad Prezeon test.

Very good. Thank you.

Our next question comes from the line Ashim Anand with Natixis Bleichroeder. Please go ahead.

Congrats on a good quarter guys. The question is regarding the ACLU patent lawsuit, not the lawsuit per se but the thought process was some of the patients and some of the clinicians are also part of that lawsuit. So I was wondering if you can comment on the fact that some of the patients and some of the clinicians are part of this lawsuit. Do you guys think that that negatively affects your position in terms of getting more adoption or getting new customers?

One never knows what the publicity around the ACLU lawsuit will do in terms of negative or positive benefit. We have certainly from the feedback we get from our sales force not have any negative comments or reluctance to use the test based on the ACLU lawsuit. And if anything, I think the added publicity has had a positive benefit to the company. And when the ACLU put forth their suit in an attempt to ban all gene patenting, it was very important for them to have some patients and so, there are some patients as plaintiffs. One of the patients complained that even though she was tested at Myriad and tested positive, she wasn’t able to get a second opinion. That, unfortunately, is an inaccuracy on the part of the ACLU. Myriad when we first launched the test licensed 13 different laboratories at major universities throughout the United States to do second opinion confirmatory testing of specific mutations in the BRCA1 and BRCA2 genes and you can still get confirmatory second opinion testing at a number of those institutions. So it’s too bad that those statements were put out there incorrectly. With regards to some of the physicians that are part of the suits, some of those were competitors of Myriad running a laboratory themselves that were unfortunately not able to continue once the patents had been granted to Myriad. So, again, it’s not a general physician that someone who was a competitor and if the patents go away, they would like to become a competitor in the future, so I think there’s clearly a best interest there. We have just completed a few hours ago the oral argument in front of judge sweet in the southern district in the court of New York and both Myriad and the ACLU presented those oral arguments and will now await his decision with regards to our motion for summary judgment.

Thanks a lot.

Our next question comes from the line of Lucy Lu with Citigroup. Please go ahead.

Great. Thank you. Can you please talk a little bit more about the fourth initiative that Mark talked about, the clinical experience program for the OB/GYN, because I think there’s a worry in the marketplace that once the physician [needs into their] entire practice it’s hard to really find new patients within that practice. Can you just describe what that program is?

Yes, Lucy. And I’m going to make a comment on the statement you made and then I’m going to turn the call over to Mark Capone to comment specifically on that fourth initiative, because this is a newer initiative that was initiated in this past second fiscal quarter, most of our other marketing initiatives were discussed in our September quarter call and were initiated actually in August. When we think of the oncology market, it is a incidence market. There are 194,000 women diagnosed with breast cancer every year. According to the American Cancer Society and an additional 22,000 diagnosed with ovarian cancer. So year over year, year in and year out, there are over 200,000 women diagnosed with cancers that can benefit from BRACAnalysis testing. So I think that’s fairly easy for investors to get their mind around. You have correctly pointed out that the OB/GYN market, because these are women who do not have cancer yet, we test them before they get cancer, so that they can take action to actually prevent the disease or at least delay the onset of the disease and catch it earlier when it’s more treatable. This is a prevalence pool and as Mark pointed out, we have identified only 5% of the women in the United States who are likely carriers, mutation carriers in the BRCA1 and BRCA2 genes, so we have a long way to go to get through this patient pool. A number of studies have shown that about 6% of the U.S. population are candidates for BRACAnalysis testing and would need the professional society guidelines. There’s 156 million women in the United States, so that represents about 9 million women who were candidates for testing and a $3000 a test, that’s $27 billion annually. Now, if you look at…

Yes. I’m happy to you and thanks for the question, Lucy. Just to add maybe a slightly more color to Pete’s comments, then I can talk about the initiative, I recently have looked at those OB/GYNs that have ordered tests from Myriad less than 50 of the 35,000 OB/GYNs have really tested what appeared to be all the appropriate patients in their practice, so that’s less than 50. There is -- there is ample opportunity in almost every OB/GYN’s practice to find additional appropriate patients, which underscores Pete’s point that we have got a long way to go. This particular initiative was designed to assist those OB/GYNs that were interested in putting in place programs that would allow them to identify and test all of those patients that are appropriate based professional cited guidelines, essentially they were -- they are many clinical studies done in a physician’s office, we work very closely with them during and after that clinical study period to make sure that we understand anything in that experience that we may have been able to provide to be more helpful as they integrate this into their practices. And as we mentioned, that has been very well received by physicians and we’ve already seen a very significant return on our investment as we institute these clinical experience programs in each of these physician’s offices.

All right. Thank you. And congratulations on a good quarter. Thanks.

Thanks, Lucy.

Thank you. We’ve come to the end of our allotted time for questions. I will now turn the call back over to Peter Meldrum. Please continue with your presentation or closing remarks.

I would like to thank everybody for attending the Myriad genetics second fiscal quarter earnings conference call and this does conclude our call. So thank you very much.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.