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Myriad Genetics Revenues Grow 10 Percent, Beating Wall Street Estimate

NEW YORK – Myriad Genetics reported after the close of the market on Wednesday year-over-year revenue gains of 10 percent for the first quarter of 2023.

The Salt Lake City-based company finished the three months ended March 31 with $181.2 million in revenues compared to $164.9 million for the same quarter in 2022, beating analysts' average estimate of $171.6 million.

The firm attributed much of its success to growth in its oncology, women's health, and mental health businesses. In Q1, revenues for oncology, women's health, and mental health amounted to $77.6 million, $71.5 million, and $32 million, respectively.

In an after-market call with investors, CEO Paul Diaz commented that despite the firm's recent efforts to integrate its genetic tests with electronic medical records, particularly through its deal with Epic Systems, those were not strong drivers of Q1 growth.

"Most of these solutions are coming into place now," Diaz said, adding that that "it really gives us a lot of confidence in our ability to grow."

Within oncology, hereditary cancer testing volumes grew 16 percent year over year, with Prolaris prostate cancer test volumes growing 22 percent.

In women's health, Q1 hereditary can cancer testing volumes grew 32 percent year over year. Excluding contributions from the recently acquired SneakPeek Early Gender DNA Test, prenatal testing volumes grew 12 percent year over year.

Nicole Lambert, the company's chief operating officer, commented that the women's health business also benefited from the company's unified provider portal, which has driven "tremendous uptake" since its January launch.

"We plan to convert all existing Myriad women's health customers to our new unified portal in the very near term," she said.

In mental health, which consists of the company's GeneSight pharmacogenomic test, the company said it added approximately 4,000 clinicians who ordered the test for the first time.

Despite that growth, GeneSight's average selling price fell below some analysts' estimates. Diaz attributed this to normal seasonality factors and changes in Medicare rates related to coding.

Last year, the Centers for Medicare and Medicaid Services had agreed to crosswalk GeneSight to PLA code 0175U.

"We saw some downward pressure as it relates to the PLA code," he said, "but we still expect that over the long term, it's going to be a positive to have a code that's unique to GeneSight."

Other drivers of growth included partnerships, such as Myriad's homologous recombination testing partnership with Illumina.

Lambert noted that Illumina's TSO 500 HRD test, for which Myriad will offer a centralized laboratory service, is now available in the US for research use only.

She also reiterated that Myriad plans to launch a new hereditary cancer risk assessment program in collaboration with SimonMed in the near future.

Myriad's R&D spending rose 6 percent year-over-year to $22.5 million from $21.2 million a year ago, while SG&A expenses grew 37 percent to $151.7 million from $110.6 million a year ago.

The company's net loss increased to $54.7 million, or $.67 per share, from $20.5 million, or $.26 per share, in the same quarter a year ago. Myriad reported an adjusted net loss per share of $.21. On average, analysts had expected an adjusted loss per share of $.19.

The firm increased the low end of its 2023 revenue guidance range by $10 million to a range of $730 million to $750 million. It also narrowed its full-year adjusted EPS guidance to between a loss per share of $.36 and $.24, with the midpoint unchanged.

Myriad ended the quarter with $53.6 million in cash and cash equivalents, and $25.1 million in marketable securities.

Myriad CFO Bryan Riggsbee noted that the company's existing credit facility expires on July 31 and that the firm "intends to replace it with a new secured credit facility, to provide additional financial flexibility."

In a statement, Diaz noted that the company remains "confident in our ability to achieve our goal of profitability by the fourth quarter and sustainable 10 percent-plus annual organic growth as we enter 2024, based on our progress."