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Myriad Genetics Q4 Revenues Increase 8 Percent

NEW YORK (GenomeWeb) – Myriad Genetics reported after the close of the market on Tuesday that its fiscal fourth quarter revenues rose 8 percent year over year.

For the three months ended June 30, total revenues were $200.5 million, compared to $186.5 million in the year-ago period, and missing the average expectation of Wall Street analysts for revenues of $193.7 million.

Revenues from molecular diagnostic testing were $187.9 million in fiscal Q4, up 8 percent from $173.7 million.

Within molecular diagnostic testing, hereditary cancer testing revenues decreased 5 percent to $144.6 million from $152.8 million, although volume grew 6 percent year over year. Myriad CFO Bryan Riggsbee attributed the decline to pricing reductions and because Myriad became an out-of-network lab for insurer Anthem. "We expect the Anthem impact to abate in the fiscal first quarter as we begin to consistently receive cash payments for Anthem claims," he told analysts during an earnings call.

Meanwhile, revenues for Vectra DA declined 19 percent to $10.3 million during Q4 from $12.7 million in Q4 2016. According to Riggsbee, Vectra DA revenue was negatively impacted by $2 million due to a request from Medicare in June to temporarily delay claim submissions while the payor and company work on a revised local coverage determination. The company has resumed submitting claims and Myriad expects to recognize the $2 million in the Q1 2018. "We're continuing our discussions with Medicare regarding a final LCD," he said.

Prolaris revenues decreased 17 percent to $2.9 million from $3.5 million and other tests brought in revenues of $2.6 million, marking a 13 percent decline from $3.1 million a year earlier. EndoPredict brought in $2.0 million, marking an 18 percent increase from $1.7 million a year ago, and the company's recently acquired pharmacogenetic test, GeneSight, contributed $25.5 million.

"We saw significant diversification of our business this year as we grew our new product volumes by 20 percent … and we ended the year with two-thirds of our volume from new products," Myriad CEO Mark Capone said during the earnings call. Following completion of the Assurex acquisition in September last year, revenues from GeneSight have "exceeded expectations," he said, and the acquisition has achieved profitability in less than nine months. 

Myriad also reported $12.6 million in revenues from pharmaceutical and clinical services, a 1 percent dip from $12.7 million in the year-ago period.

For Q4, Myriad's net profit contracted to $12.9 million, or $.19 per share, from $23.4 million, or $.32 per share, a year ago. On an adjusted basis, EPS was $.30, exceeding the analyst consensus estimate of $.26 per share.

The firm's R&D spending in the quarter decreased 4 percent to $18.8 million from $19.5 million in fiscal Q4 2015, while SG&A expenses increased 34 percent to $122.1 million from $91.3 million.  

For the full fiscal year, Myriad reported a 2 percent increase in revenues to $771.4 million from $753.8 million, exceeding analysts' estimate of $764.7 million.

Molecular diagnostic revenues totaled $722.1 million, up 2 percent from $705.7 million a year ago, with hereditary cancer testing revenues decreasing 10 percent to $568.7 million from $632.2 million in fiscal 2016. Vectra DA testing revenues fell 9 percent to $43.7 million from $47.8 million a year ago; Prolaris testing revenues rose 7 percent to $12.1 million from $11.3 million; EndoPredict revenues grew 69 percent to $7.6 million from $4.5 million; and other tests brought in revenues of $11.6 million, marking an 18 percent increase from $9.8 million. For the year, GeneSight revenues were $78.4 million, with more than 17,000 doctors ordering the tests, and testing volume was up 45 percent to 230,000 tests from the year-ago period.

The company's pharmaceutical and clinical services revenues increased 3 percent to $49.3 million from $48.1 million in fiscal year 2016.

Myriad's net income for the year declined to $21.8 million, or $.32 per share, from $125.3 million, or $1.71 per share, a year ago. On an adjusted basis, the company reported net income of $1.63 per share for the year, beating the analyst estimate for yearly EPS of $1.01.

Myriad's fiscal 2017 R&D costs rose 5 percent to $74.4 million from $70.6 million the prior year, and its SG&A expenses rose 33 percent to $476.4 million from $359.1 million in the prior year. 

The company finished the fiscal year with $102.4 million in cash and cash equivalents, and $48.3 million in marketable investment securities.

For the first fiscal quarter of 2018, Myriad is expecting revenues of between $181 million and $183 million, and adjusted EPS of $.19 to $.21. For FY 2018, the company said it expects $750 million to $770 million in revenues, and adjusted EPS of $1.00 to $1.05. Analysts are expecting Q1 revenues of $191.9 million and EPS of $.24, and 2018 revenues of $789.1 million and EPS of $1.08.

The company also announced its goal of delivering $50 million in incremental operating income by fiscal year 2020, and said it has identified 16 projects that will generate $17 million in cost savings for fiscal year 2018 and 15 projects that will yield $24 million in savings in fiscal 2019.

Myriad's shares fell nearly 6 percent to $24.09 in after-hours trading on the Nasdaq.