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Myriad Genetics Q4 Revenues Plummet 57 Percent on Coronavirus Pandemic Pressures

NEW YORK – Myriad Genetics reported after the close of the market on Thursday that its fiscal fourth quarter revenues declined 57 percent year over year.

In a call with analysts, Myriad also announced that Paul Diaz will be the company's new president and CEO, effective Aug. 13. The company had been searching for a new CEO since Mark Capone resigned from the chief executive post in February. Diaz previously served for more than a decade as president, CEO, and in various other roles at Kindred Healthcare, a provider of post-acute healthcare services. He was also a partner at private equity firm Cressey & Company.

For the three months ended June 30, the firm reported total revenues of $93.2 million, down from $215.4 million in fiscal Q4 2019 and short of the consensus Wall Street estimate of $93.9 million.

In April, due to the COVID-19 pandemic, the company withdrew its full-year revenue guidance. Back in February, Myriad had projected revenues of $735 million, EPS of $.80, and adjusted EPS of $.45. Given ongoing uncertainties due to the pandemic, the company did not provide a FY2021 revenue guidance.

However Myriad executives reassured investors during the earnings call that although test volumes during the quarter declined 58 percent year over year, they were recovering quickly due to efforts to pivot to telemedicine and direct-to-patient sample collection. "Following the substantial decline in test volumes at the end of Q3 and beginning of Q4 due to COVID-19 social distancing policies, we saw a significant recovery in test volume trends throughout the quarter, with volumes in late June increasing to approximately 75 percent of the pre-pandemic level," Bryan Riggsbee, Myriad's interim president and CEO and CFO, said in a statement.

Myriad's molecular diagnostic testing revenues were down 58 percent to $83.3 million compared to $196.9 million a year ago. Within that category, hereditary cancer test sales were down 66 percent at $39.9 million compared to $119.0 million; GeneSight pharmacogenetic testing revenues fell 71 percent to $8.5 million from $29.8 million; prenatal testing sales declined 34 percent to $16.6 million compared to $25.0 million; Vectra DA testing revenues declined 41 percent to $7.2 million from $12.2  million; Prolaris testing revenues dropped 29 percent to $4.5 million from $6.3 million; and EndoPredict breast cancer recurrence testing revenues declined 27 percent to $2.2 million from $3.0 million.

The company's other testing revenues increased 175 percent to $4.4 million from $1.6 million. Revenues from Myriad's pharmaceutical and clinical service segment decreased 47 percent to $9.9 million in fiscal Q4 from $18.5 million last year.   

Myriad reported a net loss attributable to its shareholders of $55.4 million, or $.74 per share, compared to a net loss of $4.2 million, or $.06 per share, in Q4 2019. Adjusted loss per share was $.31 and missed the average Wall Street loss-per-share estimate of $.47.

The firm's fourth quarter R&D expenses declined 17 percent to $17.4 million from $20.9 million, and its SG&A spending declined 28 percent to $107.4 million from $149.8 million.

For full-year 2020, the firm's total revenues declined 25 percent to $638.6 million compared to $851.1 million in fiscal 2019. Analysts were expecting full-year revenues of around $644 million.

Myriad's molecular diagnostic testing revenues decreased 26 percent to $586.9 million compared to $789.4 million in 2019. Within that category, hereditary cancer test sales decreased 28 percent to $347.4 million from $479.7 million a year ago; GeneSight revenues fell 34 percent to $74.1 million from $112.6 million; prenatal testing revenues decreased 27 percent to $76.7 million compared to $104.9 million; Vectra DA revenues declined 19 percent to $39.1 million from $48.3 million; Prolaris test sales decreased 3 percent to $24.7 million from $25.5 million; EndoPredict revenues rose 1 percent to $10.5 million from $10.4 million, and other tests sales grew 80 percent to $14.4 million from $8.0 million.

Pharmaceutical and clinical service revenues shrank 16 percent in fiscal 2020 to $51.7 million from $61.7 million in the prior-year period.

Myriad's fiscal 2020 net loss attributable to its shareholders was $199.5 million, or $2.69 per share, compared to a net income of $4.6 million, or $.06  per share, in 2019. Adjusted loss per share was $.08. The average Wall Street estimate was a loss of $.14 per share.

The firm's 2019 R&D expenses decreased 10 percent to $77.2 million from $85.9 million, and its SG&A spending decreased 8 percent to $510.1 million from $555.5 million.

Myriad ended the year with $163.7 million in cash and cash equivalents and $54.1 million in marketable investment securities.

For fiscal Q1 2021, analysts, on average, expect revenues of $144.6 million and a loss per share of $.05 For full-year 2021 the consensus Wall Street estimate is for revenues of $691.2 million and EPS of $.48.

In the next quarter the company expects its operating expenses to increase as it resumes direct sales efforts and brings back some furloughed employees. Myriad also expects pricing pressures to continue in the first two quarters of FY 2021.

Myriad said last quarter that it planned to offer COVID-19 testing services. Specifically, the company had said it would launch its own PCR-based COVID-19 test and seek emergency use authorization from the US Food and Drug Administration. 

During Thursday's call, the company said its lab in Salt Lake City, Utah started receiving samples in late July and its labs in Mason, Ohio and San Francisco will be running samples later this month. By the end of this month, Myriad expects to be running 3,000 COVID-19 tests per day. Currently the company is receiving 200 samples per day. Also, Myriad is in discussions with employer groups, healthcare services providers, and labs to expand this offering. The company will provide further details on COVID-19 testing in the future, a spokesman for Myriad said. 

Riggsbee acknowledged during the call that the company faced significant challenges due to the pandemic in the last quarter, but was hopeful that Diaz, the new incoming CEO, will turn Myriad around. Although Diaz lacks experience in the diagnostics industry specifically, "he dramatically expanded the revenue base" at Kindred Healthcare, and turned it into a Fortune 500 company, Riggsbee told analysts.

"We will look to leverage the company's culture and capabilities in innovation and revitalize our approach to the commercial effectiveness of our products, and improve our digital sales and marketing capabilities with customers in mind," Diaz said during the call. "There are substantial opportunities to improve Myriad's financial position, invest in innovation and R&D, and accelerate the launch of new products."

In early Friday morning trading on the Nasdaq, Myriad's stock was down around 2 percent at $13.10.

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