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Myriad Genetics Quarterly Revenues Down 22 Percent

NEW YORK – Myriad Genetics said on Monday that its revenues for the three months ended Sept. 30 declined 22 percent year over year.

Total revenues for the period were $145.2 million, down from $186.3 million. It beat the consensus Wall Street estimate of $135.2 million.

The Salt Lake City-based firm is in the process of changing its financial year to match the calendar year and did not identify the quarter ending on Sept. 30.

Total molecular diagnostics revenues were down 21 percent year over year to $135.7 million from $172.0 million a year ago, while pharmaceutical and clinical services revenues dropped 34 percent to $9.5 million from $14.3 million.

Myriad's hereditary cancer testing revenues were $80.6 million during the quarter, down 23 percent compared to $104.5 million in the prior year. Prenatal testing was $16.5 million, down 30 percent year over year from $23.5 million. The pharmacogenetics test, GeneSight, brought in $11.9 million in revenues, a 48 percent drop compared to $22.7 million. The Vectra DA rheumatoid arthritis tests booked revenues of $9.1 million, down 17 percent compared to $11.0 million. The prostate cancer test, Prolaris, contributed $6.4 million, a 2 percent dip from $6.5 million.

Meanwhile, MyChoice CDx recorded $7.8 million in revenues as a result of one-time research and milestone payments, which marked a 500 percent increase compared to $1.3 million the prior year. The breast cancer recurrence test EndoPredict contributed $2.8 million, a 22 percent growth from $2.3 million a year ago. Other revenues totaled $600,000 compared to $200,000, a 200 percent increase year over year.

Myriad is now breaking out revenues of its women's health and oncology divisions. The women's health division, which includes revenues from the myRisk Hereditary Cancer, the Foresight carrier screening, and Prequel noninvasive prenatal screening tests, recorded $55.7 million in revenues during the quarter, a 34 percent year-over-year decline. The oncology segment, which includes myRisk, Prolaris, BRACAnalysis CDx, and EndoPredict had revenues of $58.4 million, up 8 percent year over year.

The firm said that total test volumes for the quarter were 209,000, down 12 percent year over year, though it improved to 90 percent of pre-pandemic levels by the end of September, up from 75 percent at the end of June.

"As we executed strategic initiatives to accelerate growth during the recent stages of the COVID-19 pandemic, we saw a significant recovery in test volumes and related business in the fiscal quarter," Myriad President and CEO Paul Diaz said in a statement. "At the same time, we planned and launched the first phases of our strategic transformation plan, taking initial steps to simplify our business, reset our cost base, improve our end-to-end customer experience, and develop new commercial capabilities."

On a conference call with analysts, Diaz estimated that Myriad performs around 1 million tests annually, and the company has opportunities to meaningfully grow this figure. He outlined a three-phase plan for growing the company's revenues and reducing costs. In the first phase, Myriad will focus on recovering from the impact of the pandemic and on reducing costs. In the second phase, Myriad will refocus on key growth initiatives and improving financial performance, and in the third phase, the company will invest in new innovation and start mulling M&A opportunities.

Diaz said that the company will sell its Myriad RBM pharmaceutical contract research services business and the myPath Melanoma dermatology test, and on the call, he said that the segments have attracted interested buyers. The revenue from these two units was $10.1 million in the recently completed quarter compared to $14.5 million a year ago, a 30 percent decline that Myriad attributed to the sale of a German clinic earlier this year.

The company said it will implement a $40 million annualized cost savings plan over the next nine months. Myriad said it also plans to make up to $20 million in strategic marketing and technology investments to improve its customers' experience, add new sales tools, grow consumer access to on-line genetic information, and conduct targeted direct-to-consumer marketing.

"We're focused on new avenues for growth [that are] organically developed and potentially acquire products through new capabilities, such as through direct-to-consumer models, partnerships, and look to unlock our extensive dataset," Diaz said. The company has a new portal for the myRisk test to facilitate patient education, easier ordering, preauthorization, and results delivery. In its oncology and women's health segments, Myriad now provides out-of-pocket costs estimates for patients and automated support for how to get a blood draw or book an at-home visit.

Myriad began shipping at-home sample collections kits for its GeneSight Psychotropic test over the summer. Since then, 30 percent of samples for the tests have been ordered by providers who have sample kits shipped directly to patients, Diaz estimated. Sample collection kits for the MyRisk test are also being sent directly to physicians' offices or patients' homes.

Many of Myriad's tests are not reimbursed at all by commercial payors or patients, according to Diaz, and the company will focus on reducing the number of "zero payment" tests over time.  

Myriad posted a loss of $15.2 million, or $.20 per share, for the quarter compared to a loss of $20.6 million, or $.28 per share, a year ago. Non-GAAP loss per share was $.15 and beat the consensus Wall Street estimate of $.30.

It's R&D costs contracted 17 percent to $17.6 million from $21.3 million, while its SG&A costs were down 8 percent to $124.1 million from $135.5 million.

The company ended the quarter with $118.3 million in cash and cash equivalents and $42.1 million in marketable investment securities.