On May 2, 2017 Myriad Genetics, Inc. (NASDAQ:MYGN), a global leader in molecular diagnostics and personalized medicine, reported financial results for its fiscal third-quarter 2017, provided an update on recent business highlights and updated its fiscal year 2017 financial guidance (Press release, Myriad Genetics, MAY 2, 2017, View Source [SID1234518811]). Schedule your 30 min Free 1stOncology Demo! "We were very encouraged to see sequential growth in hereditary cancer testing volumes for the second consecutive quarter," said Mark C. Capone, president and CEO, Myriad Genetics. "Coupled with meaningful sequential volume growth in all of our major pipeline tests including GeneSight, Vectra DA, Prolaris, and EndoPredict, we believe we are rapidly approaching an important inflection in our business where our new products will drive accelerated revenue growth and profitability."
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Financial Highlights
The following table summarizes the financial results and product revenue for our fiscal third-quarter 2017:
Revenue
Fiscal Third-Quarter
($ in millions) 2017 2016 %
Change
Molecular diagnostic testing revenue
Hereditary cancer testing revenue $ 140.8 $ 156.3 (10 %)
GeneSight testing revenue 23.9 NA NM
Vectra DA testing revenue 11.2 12.3 (9 %)
Prolaris testing revenue 3.4 5.2* (35 %)
EndoPredict testing revenue 2.3 1.1 109 %
Other testing revenue 3.6 2.5 44 %
Total molecular diagnostic testing revenue 185.2 177.4 4 %
Pharmaceutical and clinical service revenue 11.7 13.1 (11 %)
Total Revenue $ 196.9 $ 190.5 3 %
Income Statement
Fiscal Third-Quarter
($ in millions) 2017 2016 %
Change
Total Revenue $ 196.9 $ 190.5 3 %
Gross Profit 152.6 150.3 2 %
Gross Margin 77.5 % 78.9 %
Operating Expenses 139.7 107.7 30 %
Operating Income 12.9 42.6 (70 %)
Operating Margin 6.6 % 22.4 %
Adjusted Operating Income 24.0 45.8 (48 %)
Adjusted Operating Margin 12.2 % 24.0 %
Net Income 4.2 34.5 (88 %)
Diluted EPS 0.06 0.47 (87 %)
Adjusted EPS $ 0.27 $ 0.41 (34 %)
* Included Medicare retrospective payments
Business Highlights
• myRisk Hereditary Cancer
Hereditary cancer volumes grew on a sequential basis for the second consecutive quarter.
A publication in The Oncologist by researchers at Northwestern University compared 4,250 variants from ClinVar to those from Myriad Genetics. In the study, only 73 percent of the classifications in ClinVar were consistent with Myriad classifications with 27 percent discordant. In addition, it was shown that Myriad could definitely classify up to 60 percent of the variants of uncertain significance from other laboratories.
• GeneSight
Volume grew 44 percent year-over-year to more than 60,000 tests performed in the fiscal third-quarter.
Completed enrollment ahead of schedule in a 1,200 patient clinical utility study evaluating GeneSight in patients with treatment resistant depression. The company anticipates top line data by the end of calendar year 2017.
Published data in Clinical Therapeutics which evaluated 2,168 patients whose treatment was either congruent or non-congruent with the GeneSight test result which demonstrated health savings of $3,998 for primary care physicians and $1,308 for patients treated by psychiatrists after paying for the cost of the test.
Completed a payer demonstration project using the Optum healthcare informatics platform from United Health that demonstrated substantial cost savings associated with the use of GeneSight. Initiated similar demonstration projects with Humana and HealthCore, a subsidiary of Anthem Blue Cross Blue Shield.
Launched a highly successful pilot sales program for GeneSight in the preventive care market with the average sales territory already generating a 300 sample annual run rate.
• Vectra DA
Volumes increased five percent sequentially with approximately 38,500 tests performed.
Creaky Joints, a leading advocacy group for arthritis patients added Vectra DA to its professional guidelines. This builds upon the recent addition of Vectra DA to the United Rheumatology guidelines, a physician guideline body comprising approximately 10 percent of practicing rheumatologists.
• Prolaris
Volumes grew 17 percent year-over-year and nine percent sequentially with approximately 5,100 tests ordered in the third quarter.
The comment period ended on a draft local coverage determination from Palmetto GBA for favorable-intermediate patients, a new indication that would represent a market expansion of approximately 30,000 patients per year in the United States. Prolaris is the only test to receive proposed Medicare coverage in this patient population.
At the upcoming American Urology Association meeting, Myriad will be presenting a 767 patient study that demonstrated the ability of Prolaris to predict metastases from biopsy samples with a high degree of statistical significance.
• EndoPredict
Revenues grew 109 percent year-over-year to $2.3 million in the fiscal third-quarter.
Launched EndoPredict in the United States at the end of the fiscal third-quarter.
In aggregate, Myriad has now received positive coverage decisions from payers in the United States representing 83 million lives.
• myPath Melanoma
Myriad’s third clinical validation study, which demonstrated myPath Melanoma was able to differentiate melanoma from benign nevi with 95 percent diagnostic accuracy, was published in Cancer Epidemiology.
Myriad has submitted its reimbursement dossier for myPath Melanoma to Medicare and private payers.
• Companion Diagnostics
AstraZeneca announced that olaparib met its primary endpoint in BRCA positive, HER2- metastatic breast cancer in the OlympiAD study, demonstrating a statistically significant benefit in progression free survival. This represents a potential 60,000 patient per year market for BRACAnalysis CDx as a companion diagnostic.
Myriad signed a research collaboration with BeiGene which is a global pharmaceutical company developing the PARP inhibitor BGB-290 in the United States.
Signed a commercial collaboration with Clovis Oncology to perform BRACAnalysis CDx testing. Myriad is now performing companion diagnostic testing for every major company developing a PARP inhibitor.
Submitted our regulatory filing in Japan for BRACAnalysis CDx as the companion diagnostic for Lynparza in conjunction with our collaboration with AstraZeneca.
• International
International revenue grew 41 percent year-over-year and comprised five percent of total revenue in the fiscal third-quarter.
International EndoPredict revenue grew 109 percent year-over-year, largely as a result of recent French and German reimbursement.
Fiscal Year 2017 and Fiscal Fourth-Quarter 2017 Financial Guidance
Below is a table summarizing Myriad’s updated fiscal year 2017 and fiscal fourth-quarter 2017 financial guidance:
Revenue GAAP Diluted
Earnings Per
Share Adjusted
Earnings Per
Share
Fiscal Year 2017 $763-$765
million $0.23-$0.25 $1.01-$1.03
Fiscal Fourth-Quarter 2017 $192-$194
million $0.11-$0.13 $0.26-$0.28
These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during the conference call today to discuss the fiscal third-quarter financial results, fiscal year 2017, and fiscal fourth-quarter 2017 financial guidance.