On August 3, 2021 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its second quarter ended June 30, 2021 and provided an update on recent business performance and strategic transformation plans (Press release, Myriad Genetics, AUG 3, 2021, View Source [SID1234585589]).
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"This was another solid quarter for Myriad Genetics as we delivered strong revenue growth and grew earnings ahead of our initial expectations, an important step towards demonstrating our ability to achieve our goal of sustainable long-term growth and profitability," said Paul J. Diaz, president and CEO. "These results reflect the hard work of our teammates, and their dedication to meeting the needs of our patients and provider partners, as we continue to advance our mission to empower every individual with the genetic answers inside each of us."
Financial and Operational Highlights:
Total revenue in the quarter was $189.4 million, an increase of 103% year-over-year and 9% sequentially. The following product categories saw significant sequential improvements:
*Tumor profiling revenue for the three months ended March 31, 2021 includes approximately $7M in positive revenue adjustments from prior periods related to back pay for the Prolaris test for prostate cancer. Excluding that adjustment tumor profiling grew 21% sequentially.
Diagnostic test volumes of 273,000 increased 70% year-over-year and 8% sequentially and average revenue per test increased 2% sequentially.
GAAP gross margin was 71.6%; adjusted gross margin was 72.1%, which improved 70 basis points sequentially.
GAAP total operating expenses were $156.5 million; adjusted total operating expenses decreased $3.9 million sequentially to $123.1 million.
GAAP operating loss in the quarter was $(20.8) million; adjusted operating income was $13.5 million.
GAAP earnings per share (EPS) were $(0.06); adjusted EPS were $0.12, which improved $0.18, sequentially.
Closed the sale of the Myriad myPath business on May 28, 2021 and Myriad RBM business on July 1, 2021.
Expect to close the sale of the Myriad Autoimmune business in third quarter of 2021.
Ended the quarter with $184.3 million in cash, cash equivalents and investments.
"These operating results are particularly encouraging in light of the significant amount of organizational change we’ve undertaken, as we execute on our strategic transformation and growth plans and complete the divestitures of RBM, Vectra and myPath," said Diaz. "We remain focused on elevating our portfolio of leading products to their full potential, as we strengthen our commercial capabilities, improve our customers’ experience, and build a platform to support accelerated growth and innovation. The progress we made this quarter gives us confidence in our ability to execute in our core segments, and accelerate and finance our emerging R&D activities and technological innovations to advance our mission, new products and our business development efforts."
Business Transformation Updates:
In the second quarter, the company remained focused on executing in its core segments, as it announced and/or closed several divestitures, completed its sales force realignment, and readied for the launch of its new brand and marketing strategy. The company also saw continued positive results from its revenue cycle enhancement investments.
On May 28, 2021, the company completed the sale of the Myriad myPath, LLC laboratory to Castle Biosciences, Inc. for $32.5 million in cash. On July 1, 2021, the company completed the sale of its wholly-owned subsidiary, Myriad RBM, Inc., to Q2 Solutions for $198 million, subject to customary adjustments. On May 3, 2021, the company signed a definitive agreement to sell select operating assets and intellectual property, including the Vectra test, to Laboratory Corporation of America Holdings for $150 million in cash. The transaction is expected to close by the end of the third quarter. Total revenue from RBM, Vectra and myPath during the quarter was $20.7 million.
The company intends to use the expected total divestiture gross proceeds of approximately $380 million to fund investments in technology, R&D and commercial efforts as well as to strengthen the balance sheet.
On July 30, 2021, the company made a voluntary principal payment of $106.4 million, which paid down the full amount that remained outstanding under its $264 million amended credit facility.
Business Performance and Highlights:
Women’s Health
The goal of Myriad Women’s Health is to become a leader in personal and family health and wellness, a rapidly growing market for genetic testing and precision medicine. Myriad Women’s Health currently serves women assessing their risk of cancer, and those who are pregnant or planning a family. The Myriad Women’s Health business delivered revenue of $67.3 million in the quarter, an increase of 123% year-over-year and 22% sequentially.
Hereditary Cancer
MyRisk Hereditary Cancer test volumes for the Women’s Health business increased 8% sequentially. Average selling prices (ASP) were stable sequentially excluding positive revenue adjustments related to better-than-expected cash collections on tests ordered in prior periods.
Yesterday, Myriad Genetics expanded access to genetic testing with the launch of the first polygenic breast cancer risk assessment score validated for women of all ancestries.
MyRisk Hereditary Cancer test with RiskScore provides breast cancer risk assessment for all women not previously diagnosed with breast cancer, regardless of ancestry.
Together, MyRisk with RiskScore offers a breast cancer risk assessment designed to improve patient outcomes and help minimize healthcare disparities. RiskScore results are informed by a combination of genetic markers, clinical and biological variables, personal and family history, and ancestry-specific data. RiskScore is available at no additional cost to women who take the MyRisk test.
Prenatal
The company’s prenatal business continued to demonstrate positive growth trends in the quarter with test volumes increasing 31% year-over-year and 4% sequentially.
Prenatal revenue growth was driven by ASP improvement and increased volumes.
The company continues to see growth driven by its proprietary AMPLIFY technology, which further increases the performance of its Prequel noninvasive prenatal screening (NIPS) test.
Oncology
Myriad’s Oncology business provides hereditary cancer testing, such as MyRisk, for patients who have cancer. It also provides tumor profiling products such as the EndoPredict breast cancer prognostic test, the Prolaris prostate cancer test, and the myChoiceCDx companion diagnostic test for predicting response to PARP inhibitors. The Oncology business delivered revenue of $76.3 million in the quarter, an increase of 121% year-over-year and 7% sequentially.
Hereditary Cancer test volumes for the Oncology business in the quarter increased 97% year-over-year and 7% sequentially.
Tumor profiling test volumes increased 41% year-over-year and 13% sequentially.
Myriad’s partnership with Intermountain Healthcare, supported by Illumina, will provide Myriad’s leading germline hereditary cancer test (MyRisk), Myriad’s FDA approved companion diagnostic test (myChoiceCDx), together with a Myriad branded tumor profiling test powered by Illumina’s TSO500 and run by Intermountain’s Precision Genomics. Importantly, patients and their healthcare providers will receive one comprehensive solution from one laboratory with one team of scientists interpreting the results thereby significantly improving the quality and ease of use of the results. The product is expected to launch in early 2022.
Mental Health
Myriad’s Mental Health business consists of the pharmacogenomic category GeneSight psychotropic test that covers 61 medications commonly prescribed for depression, anxiety, ADHD, and other psychiatric conditions. The Mental Health business delivered revenue of $22.6 million in the quarter, an increase of 166% year-over-year and 28% sequentially.
Test volumes for GeneSight were up 161% year-over-year and 22% sequentially.
GeneSight saw a strong increase in new ordering providers with more than 2,700 physicians ordering GeneSight for the first time in the quarter. Overall, the number of ordering physicians increased 12% sequentially and test utilization per provider increased 11% sequentially.
Financial Guidance
Given the continued unpredictability surrounding the COVID-19 pandemic (and its variant strains) as well as the impact it continues to have on the healthcare environment, customer behavior and the ability to market tests to physicians, the company will not provide financial guidance for the third quarter ending September 30, 2021 or fiscal year 2021. In addition, the third quarter has historically been impacted by summer seasonality and may be impacted by the recent surge of the COVID -19 Delta variant.
Conference Call and Webcast
A conference call will be held today, Tuesday, August 3, 2021, at 4:30 p.m. EDT to discuss Myriad’s financial results for the second quarter 2021 and business developments. The dial-in number for domestic callers is 1-800-920-2191. International callers may dial 1-212-271-4651. All callers will be asked to reference reservation number 21996351. An archived replay of the call will be available for seven days by dialing 1-800-633-8284 and entering the reservation number above. The conference call and slide presentation will be available through a live webcast at www.myriad.com.
About Myriad Genetics
Myriad Genetics is a leading genetic testing and precision medicine company dedicated to advancing health and wellbeing for all, empowering individuals with vital genetic insights and enabling healthcare providers to better detect, treat and prevent disease. Myriad discovers and commercializes genetic tests that determine the risk of developing disease, assess the risk of disease progression, and guide treatment decisions across medical specialties where critical genetic insights can significantly improve patient care and lower healthcare costs. For more information, visit the company’s website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, MyRisk, Myriad MyRisk, MyRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice CDx, Vectra, Prequel, Foresight, GeneSight, riskScore and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its wholly owned subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G.