Skip to main content
Premium Trial:

Request an Annual Quote

Myriad Genetics Q2 Revenues Up 2 Percent

This article has been updated with information and quotes from Myriad Genetics' Q2 earnings call. 

NEW YORK (GenomeWeb) – Myriad Genetics reported after the close of the market on Tuesday that its second quarter revenues in fiscal 2017 grew 2 percent, beating Wall Street expectations.

For the three months ended Dec. 31, the firm reported total revenues of $196.5 million, compared to $193.3 million in Q2 2016, and beating the consensus Wall Street estimate of $189.7 million.

Myriad's molecular diagnostic testing revenue inched up 1 percent to $183.9 million from $182.6 million in Q2 2016. Hereditary cancer test sales fell 13 percent, to $143.9 million from $165.6 million a year earlier. On a conference call with analysts following the release of the earnings, Myriad CFO Bryan Riggsbee mostly attributed the lower year-over-year revenues in the hereditary cancer segment to declines in test volume, but also said there were declines in average selling price per test.

The firm's Vectra DA rheumatoid arthritis test brought in $10.7 million in revenues, marking a 5 percent decrease from $11.3 million a year earlier; its Prolaris prostate cancer test had revenues of $3.1 million, a 63 percent increase from $1.9 million in the year ago period; and the EndoPredict breast cancer test netted $1.6 million million in revenues, a 78 percent increase from $900,000 in Q2 2016.

The GeneSight pharmacogenetic test, which the company garnered through its acquisition of Assurex, brought in revenues of $21.7 million in Q2. Test volumes were up 61 percent year-over-year, with 57,000 tests performed.

During the quarter, Myriad's pharmaceutical and clinical service revenues increased 18 percent to $12.6 million from $10.7 million in Q2 2016. The company's revenues from international markets were 5 percent of total product revenue.

"Revenues this quarter reached their highest level in the last three years, driven by a return to sequential growth in hereditary cancer revenue and strong results from GeneSight," said Myriad CEO Mark Capone in a statement. "Importantly, our diversification strategy is working with new products now contributing more than two thirds of testing volume. We also made steady progress on increasing reimbursement that will ultimately unlock significant operating leverage and long-term shareholder value."

During the earnings call, Capone added that hereditary cancer testing revenues grew 3 percent sequentially, as did test volumes in the oncology market "reversing a trend for the last 18 months." Moreover, non-hereditary cancer tests and services comprised 67 percent of total test volume and 27 percent of total revenue.

According to Riggsbee, GeneSight exceeded hereditary cancer testing volumes in Q2, and became Myriad's highest volume test. Assurex is hoping to complete enrollment for a 1,200-patient clinical utility study soon and expects to report results by the end of calendar year 2017. "If fully reimbursed, the revenue from GeneSight this quarter is rapidly approaching our current hereditary cancer revenue," Capone noted.

Myriad executives also spent quite a bit of time during the call discussing Vectra DA, and Medicare contractor Palmetto GBA's draft local coverage determination to stop covering the test based on a study called AMPLE, which concluded that test scores didn't reflect disease activity. 

Riggsbee acknowledged that AMPLE — which Myriad has argued used an "unconventional statistical analysis" — negatively impacted Vectra DA revenues during the quarter. To prove its point, Myriad obtained the raw data files from the study and performed an analysis that showed that Vectra DA statistically significantly predicted radiographic progression. The company hopes that this data, which was published toward the end of the second quarter, will bolster test revenues in coming quarters.   

Capone also noted that EndoPredict, which gauges the aggressiveness of breast cancer, has secured positive coverage decisions from 19 insurance plans. Myriad has also submitted its dossier to Medicare for coverage of the test. The company is hoping this test, once launched in the second half of FY2017, will be a revenue growth driver in fiscal year 2018.

The firm's Q2 net income fell to $5.9 million, or $.09 per share, from $37.1 million, or $.50 per share, in Q2 2016. On an adjusted basis, its EPS was $.26, beating the average Wall Street estimate of $.24.

Myriad's Q2 R&D expenses rose 11 percent to $18.6 million from $16.7 million, while its SG&A spending rose 32 percent to $120.3 million from $90.8 million.

Myriad ended the quarter with $108.1 million in cash and cash equivalents, and $54.4 million in marketable investment securities. The company also repurchased approximately $10 million of common stock under its share repurchase program, and ended the quarter with approximately $161 million remaining on its current share repurchase authorization.

Myriad updated its financial guidance, and now expects Q3 revenues of $188 million to $190 million, and adjusted EPS of $.23 to $.25. For fiscal year 2017, the company expects revenues of $745 million to $755 million, and adjusted EPS of $1.00 to $1.05. Analysts are expecting Q3 revenues of $190.2 million and EPS of $.25, and fiscal 2017 revenues of $751.8 million and EPS of $.98.

Myriad's shares rose more than 10 percent to $17.00 in Wednesday morning trading on the Nasdaq.