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Myriad Genetics Reports 18 Percent Fiscal Q3 Revenue Growth

NEW YORK (GenomeWeb) – Myriad Genetics reported after the close of the market on Tuesday that its fiscal third quarter revenues increased 18 percent year over year but fell short of the consensus Wall Street estimate.

For the three months ended March 31, the firm reported total revenues of $216.6 million compared to $183.1 million in its fiscal Q3 2018. The consensus Wall Street estimate was $217.5 million.

Myriad's molecular diagnostic testing revenue also increased 18 percent overall to $200.5 million from $169.3 million in Q3 2018. Within that category, hereditary cancer test sales contributed $117.6 million, a 4 percent increased from $113.1 from a year earlier.

Prenatal testing netted $30.6 million in revenues and test volume grew 7 percent sequentially. For Myriad's Prolaris prostate cancer test, revenues grew by 8 percent compared to the same quarter last year, $6.9 million versus $6.4 million. Quarterly revenues from the company's EndoPredict breast cancer test increased 22 percent, $2.8 million in Q3 from $2.3 million the prior year.

Several tests also declined in sales during Q3. Revenues for GeneSight, the psychiatric pharmacogenetic test, dipped 3 percent, bringing in revenues of $29.6 million in Q3 compared to $30.4 million in the year ago quarter, though test volume increased 19 percent year over year. Myriad's Vectra DA rheumatoid arthritis test brought in $11.3 million during the quarter, a 25 percent decrease from $15 million in the same period last year. Myriad's other testing revenues fell 19 percent to $1.7 million from $2.1 million.

Myriad's pharmaceutical and clinical service revenues increased 17 percent to $16.1 million in Q3 from $13.8 million a year ago.

Myriad Genetics CEO Mark Capone told analysts during a conference call to discuss its financial results that the company has a strategy to engage with employers directly to expand GeneSight and Vectra DA coverage. Recently, the firm announced that Kroger Prescription Plans will include GeneSight as a benefit option for its employer group clients, similar to an arrangement the two inked for Vectra last year. As part of the agreement around GeneSight, Kroger is implementing a medical intervention step where Kroger pharmacists will discuss GeneSight with treating physicians.  

The company is in discussions with other Fortune 500 employers about the tests. Additionally, as part of its efforts to bolster reimbursement for GeneSight specifically, Myriad plans to publish two additional analysis from its GUIDED study.

UnitedHealthcare recently announced seven companies that were chosen to be included in its Preferred Laboratory Network. Myriad was excluded from the network. However, Capone downplayed any potential negative impact from this and highlighted that Myriad did sign an in-network contract with UHC for prenatal tests that will go into effect April 1. 

Capone also discussed Myriad's progress in the companion diagnostics segment during the call, including the submission of a premarket approval application module for myChoice HRD as a test to identify best responders for GlaxoSmithKline's PARP inhibitor niraparib in ovarian cancer patients. Myriad said that it intends to file a supplementary premarket approval application for BRACAnalysis CDx as a companion diagnostic for AstraZeneca's olaparib (Lynparza) in metastatic pancreatic cancer, and added that the two firms have expanded their collaborative agreement around the test. The Japanese Ministry of Health Labor and Welfare, meanwhile, approved BRACAnalysis CDx to predict which first-line ovarian cancer patients would likely respond to olaparib. 

In mid-March, Medicare administrative contractor Palmetto GBA issued a final local coverage determination for Myriad's myPath Melanoma test, while another MAC, Noridian, also issued a final LCD, which becomes effective in June. During the call, Capone said that Medicare patients comprise 35 percent of the melanoma diagnostic market. 

The company is also continuing to engage with commercial payors to expand coverage for myPath melanoma. According to Capone, Myriad has received reimbursement from eight commercial payors and expects to start generating revenues for the test in the second quarter of fiscal year 2020 after coding and pricing have been established.

The company now expects to report $856 million in revenue and adjusted EPS of $1.74 for fiscal 2019. It had previously estimated full year revenues of $855 million to $865 million and adjusted EPS of $1.70 to $1.75.

In the fourth quarter, the company expects to report $220 million in revenues and adjusted EPS of $.48.

Myriad's Q3 net income attributable to its shareholders was $6.9 million or $.09 per share, compared to $9.1 million, or $.13 per share, in Q3 2018. On an adjusted basis, its EPS was $.46, beating the average Wall Street estimate of $.42.

The firm's third quarter R&D expenses rose about 16 percent to $21.5 from $18.5 million, and its SG&A spending rose 30 percent to $140.6 from $107.9 million.

Myriad ended the quarter with $84.9 million in cash and cash equivalents and $64.8 million in marketable investment securities.

On Wednesday morning trading following the earnings call, Myriad's stock price had decreased around 20 percent on the Nasdaq and was trading at around $27.59.