Myriad Revenues Increase 7 Percent in Q1 2018

This article has been updated with additional information and quotes Myriad's Q1 earnings call.

NEW YORK (GenomeWeb) – Myriad Genetics reported after the close of the market on Tuesday that its first quarter revenues in fiscal 2018 increased 7 percent year over year, led by strong GeneSight sales.

For the three months ended Sept. 30, the firm reported total revenues of $190.2 million, compared to $177.5 million in Q1 2017, and beating the consensus Wall Street estimate of $183.4 million.

Myriad's molecular diagnostic testing revenue increased by 8 percent to $178.8 million from $165.1 million in Q1 2017. Hereditary cancer test sales fell 9 percent to $126.7 million from $139.3 million a year earlier.

"We continue to see strong sample trends," Myriad President and CEO Mark Capone said during an earnings call, noting that in spite of the year-over-year drop in revenues in the hereditary cancer testing segment, it "exceeded the 3 percent sample volume growth contemplated in guidance." He did not cite a precise volume growth figure, however. 

Myriad CFO Bryan Riggsbee added on the call that the company expects that year-over-year pricing declines in hereditary cancer testing will moderate as the year progresses due to the timing of long-term payment contracts negotiated earlier.

By testing segment, the firm's Vectra DA rheumatoid arthritis test brought in $16.0 million in revenues, marking a 38 percent increase from $11.6 million a year earlier; its Prolaris prostate cancer test revenues remained flat at $2.9 million; the EndoPredict breast cancer test netted $1.9 million in revenues, a 12 percent increase from $1.7 million in Q1 2017; and the GeneSight pharmacogenetic test recorded $28.8 million in revenues, compared to $7.2 million compared to the year-ago period, a 300 percent increase.

GeneSight revenue was ahead of expectations in Q1, according to Riggsbee. "If the recent positive randomized controlled trial leads to coverage decisions in fiscal year 2018, this could represent an upside to guidance," he noted.

Myriad recently reported data from a 1,200-patient, double-blind, multicenter, randomized controlled trial evaluating GeneSight's ability to guide psychiatric treatment response in major depressive disorder. The study showed that patients tested on GeneSight experienced a statistically significant improvement in remission rates and response rates at eight weeks, compared to patients receiving standard care. After eight weeks, GeneSight-tested patients also had a greater improvement depressive symptoms compared to the standard care arm, though the results weren't statistically significant.

According to Capone, GeneSight's ability to significantly improve remission and response is important because these endpoints reflect improvements in patients' quality of life. Moreover, the study compared GeneSight's ability to guide therapy not against a placebo-treated group, but against physician's choice of therapy for a patient.  

"This was a very high bar for an antidepressant study," Capone said. Myriad expects that data from this large RCT will convince payors to more readily reimburse for the test when considered alongside other clinical utility studies, and a health economic evaluation showing GeneSight saved more than $6,700 in prescription costs when used to guide treatment for patients with generalized anxiety disorder. The company will present the full data set from this study at the American Psychiatric Association annual meeting in May 2018.

During the quarter, Myriad also launched a SNP panel, called riskScore, which is a new evaluation the company is providing for breast cancer risk alongside its 28-gene MyRisk Hereditary Cancer panel. According to Capone, riskScore can provide "definitive" breast cancer risk for 100 percent of patients of European descent, while MyRisk can do so for only 10 percent of patients. Myriad is planning to provide further validation of riskScore at the upcoming San Antonio Breast Cancer Symposium in December. 

During the quarter, Myriad's pharmaceutical and clinical service revenues decreased 8 percent to $11.4 million from $12.4 million in Q1 2017. Myriad is expecting a decline in pharmaceutical and clinical service revenues based on timing of contracts, but according to Riggsbee, the headwinds in certain segments will be offset by revenue increases from GeneSight, Vectra DA, and EndoPredict in the coming quarters.

The firm posted a net income in the first quarter of $81.1 million, or $1.15 per share, compared to a net loss of $1.2 million, or $.02 per share, in Q1 2017. On an adjusted basis, its EPS was $.26, beating the average Wall Street estimate of $.21.

Myriad's Q1 R&D expenses declined 8 percent to $17.8 million from $19.4 million, while its SG&A spending rose 3 percent to $115.2 million from $111.9 million.

Myriad ended the quarter with $87.9 million in cash and cash equivalents, and $60.4 million in marketable investment securities.

In Q2, Myriad is expecting revenues of $187 million to $189 million, and EPS of between $.08 and $.10. On an adjusted basis, the company is guiding to EPS of $.22 to $.24. For FY 2018 the company is projecting revenues of between $750 million and $770 million. EPS is expected in the range of $1.41 to $1.46, while adjusted EPS is anticipated to be between $1.00 and $1.05.

Analysts are expecting revenues of $189.9 million and EPS of $.25 in Q2 2018, and FY 2018 revenues of $764.0 million with EPS of $1.03.

During Wednesday morning trading on the Nasdaq, Myriad's stock was down 1 percent at $29.60.