On August 8, 2017 Myriad Genetics, Inc. (NASDAQ:MYGN), a global leader in molecular diagnostics and personalized medicine, reported financial results for its fiscal fourth-quarter 2017 and fiscal full-year 2017, provided an update on recent business highlights and issued its fiscal year 2018 and fiscal first-quarter 2018 financial guidance (Press release, Myriad Genetics, AUG 8, 2017, View Source [SID1234520189]).

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"This quarter we saw record demand for hereditary cancer tests and now have 86 percent of our hereditary cancer revenue under long-term contract, providing future stability upon which to build our growing portfolio of new products," said Mark C. Capone, president and CEO, Myriad Genetics. "Our diversification efforts showed continued success with new products representing greater than two-thirds of test volume and 28 percent of revenue in the fourth-quarter. Our strong progress on transforming the company leaves us well positioned to achieve our long-term strategic goals."

Financial Highlights

The following table summarizes the financial results and product revenue for our fiscal fourth-quarter 2017:

Revenue
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2017 2016 %
Change 2017 2016 %
Change
Molecular diagnostic testing revenue

Hereditary cancer testing revenue $ 144.6 $ 152.8 (5%) $ 568.7 $ 632.3 (10%)

GeneSight testing revenue 25.5 NA NM 78.4 NA NM

Vectra DA testing revenue 10.3 * 12.7 (19%) 43.7 47.8 (9%)

Prolaris testing revenue 2.9 3.5 (17%) 12.1 11.3 7%

EndoPredict testing revenue 2.0 1.7 18% 7.6 4.5 69%

Other testing revenue 2.6 3.1 (13%) 11.6 9.8 18%

Total molecular diagnostic testing revenue 187.9 173.7 8% 722.1 705.7 2%

Pharmaceutical and clinical service revenue 12.6 12.7 (1%) 49.3 48.1 3%

Total Revenue $ 200.5 $ 186.5 8% $ 771.4 $ 753.8 2%

Income Statement
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2017 2016 %
Change 2017 2016 %
Change
Total Revenue $ 200.5 $ 186.5 8% $ 771.4 $ 753.8 2%

Gross Profit 158.0 146.5 8% 600.3 596.5 1%
Gross Margin 78.8 % 78.6 % 77.8 % 79.1 %

Operating Expenses 140.9 110.8 27% 550.8 429.7 28%

Operating Income 17.1 35.7 (52%) 49.4 166.8 (70%)
Operating Margin 8.5 % 19.1 % 6.4 % 22.1 %

Adjusted Operating Income 28.0 39.0 (28%) 97.2 179.5 (46%)
Adjusted Operating Margin 14.0 % 20.9 % 12.6 % 23.8 %

Net Income 12.9 23.4 (45%) 21.8 125.3 (83%)

Diluted EPS 0.19 0.32 (41%) 0.32 1.71 (81%)

Adjusted EPS $ 0.30 $ 0.36 (17%) $ 1.05 $ 1.63 (36%)
* Negatively impacted by delayed submission of $2 million in Medicare claims

Business Highlights

• Hereditary Cancer

Record hereditary cancer demand in the fourth quarter with 6 percent year-over-year volume growth.
Signed multiple payer contracts, increasing revenue under long-term contract to 86 percent.
Presented the results of a 2,000 patient study with myRisk Hereditary Cancer at ASCO (Free ASCO Whitepaper) demonstrating that 50 percent of patients with mutations would be missed with current testing criteria and that 34 percent of mutations were in genes not indicated by family history.
• New Products

GeneSight in fiscal 2017 grew revenue by 34 percent. Additionally, over 17,000 physicians ordered the test representing a 55 percent increase.
Prolaris received a final local coverage determination (LCD) from Palmetto GBA for favorable intermediate patients which will expand coverage to approximately 30,000 additional Medicare patients.
Prolaris clinical validity study with 767 patients presented at the American Urological Association annual meeting demonstrated the ability of the test to predict metastatic disease. The study found that patients with a low Prolaris score had a 10-year risk of metastases of less than 1 percent, while patients with a high Prolaris score had a 10-year risk of metastases of 25 percent.
Vectra DA clinical utility study presented at the European League Against Rheumatism (EULAR) demonstrated the ability of the test to predict radiographic progression in a meta-analysis of six cohorts incorporating over 800 patients. Vectra DA predicted radiographic progression in all six patient cohorts, and had greater than three times the predictive power of current standard of care disease activity measures such as DAS28-CRP and CRP.
Vectra DA clinical utility study presented at EULAR demonstrated the ability of the test to predict which patients could be considered for biologic tapering. In a study of 146 patients, relapse rates for patients who had undergone full or partial tapering on biologic therapy were 24 percent in patients with a low Vectra DA score and negative ACPA compared to 79 percent in patients with high Vectra DA scores and positive ACPA. The study found that patients with low Vectra DA scores and/or negative ACPA were at a low risk for relapse when tapered, and average biologic usage was reduced for the entire cohort by 20 percent.
Companion diagnostics advanced with planned submission of a premarket approval (PMA) supplement in the second half of calendar year 2017 to the U.S. Food and Drug Administration for BRACAnalysis CDx to identify HER2-negative, metastatic breast cancer patients for olaparib therapy.
EndoPredict received a draft LCD from Medicare for node negative and node positive, ER+ patients with breast cancer representing a U.S. market of approximately 140,000 patients per year. If approved, Myriad would have coverage for approximately 75 percent of breast cancer patients when combined with the contracted private lives in the United States.
• International

EndoPredict revenues increased 18 percent compared on a year-over-year basis.
Received provincial reimbursement in Quebec for EndoPredict. Expect additional Canadian provincial decisions in fiscal year 2018.
• Elevate 2020

Announced the launch of the Elevate 2020 program with a goal of delivering $50 million of incremental operating income by fiscal year 2020. Projects already have been identified that will generate $17 million in operating income in fiscal 2018 and an additional $24 million in operating income in fiscal 2019.
Fiscal Year 2018 and Fiscal First-Quarter 2018 Financial Guidance
Below is a table summarizing Myriad’s fiscal year 2018 and fiscal first-quarter 2018 financial guidance:

Revenue GAAP Diluted
Earnings Per
Share Adjusted
Earnings Per
Share
Fiscal Year 2018 $750-$770
million $0.37-$0.42 $1.00-$1.05

Fiscal First-Quarter 2018 $181-$183
million $0.05-$0.07 $0.19-$0.21
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 fourth-quarter financial results, fiscal 2017 financial results, fiscal year 2018 financial guidance, and fiscal first-quarter 2018 financial guidance.