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Myriad's Q2 Revenues Increase 21 Percent; New $200M Stock Buyback Program Launched

NEW YORK (GenomeWeb News) – Myriad Genetics' fiscal second-quarter revenues increased 21 percent year over year, the Salt Lake City firm reported after the close of the market on Tuesday.

Total revenues for the three months ended Dec. 31, 2012 came in at $149.1 million, up from $122.8 million in the year ago period, and beating the average analyst estimate of $143.7 million.

On a conference call following the release of Myriad's earnings results, President and CEO Peter Meldrum said that much of the revenue growth resulted from an expansion of the markets for the company's existing portfolio of tests and increasing penetration into those markets.

That is one of three growth initiatives that Myriad is in the process of carrying out, which also includes expanding its operations overseas, particularly in Europe. Myriad also has a distribution network in 61 countries around the world.

The third growth initiative is expansion of the company's product portfolio beyond cancer, urology, and women's health into medical specialties such as pathology, neuroscience, and autoimmune diseases, Meldrum said.

Myriad said that its molecular diagnostic testing revenues in the quarter improved 20 percent to $140.7 million from $117.6 million a year ago as oncology-related sales rose 16 percent year over year to $90.9 million and women's health revenues climbed 27 percent to $49.8 million.

Within MDx and by test category, the BRACAnalysis test posted $110.3 million in revenues, up 9 percent from a year ago. The test sales represented 74 percent of total revenues in the second quarter, Myriad said.

Colaris and Colaris AP tests moved up 10 percent to $12.1 million, while the BRACAnalysis Large Rearrangement Test, or BART, saw revenues of $15.8 million as 65 percent of patients who ordered BRACAnalysis also ordered the BART test.

Other molecular diagnostic test revenues were up almost 2 percent to $2.5 million.

Additionally, companion diagnostic testing revenues jumped 63 percent to $8.5 million from $5.2 million, driven by the firm's recently announced diabetes partnership with Sanofi. On the call Meldrum disclosed that Sanofi will pay Myriad about $10 million to analyze patient samples as part of the deal.

He also announced that Myriad is in the process of developing a new prostate cancer test, in addition to its existing Prolaris test. While Prolaris provides information about a cancer's aggressiveness to help guide physicians in treating patients already diagnosed with the disease, the new test is designed to diagnose the cancer in men with rising prostate-specific antigen levels.

The test will be used for analysis of prostate tissue from a biopsy "and is able to detect the presence of cancer even if the biopsy were to miss the tumor and be classified as negative," Meldrum said, adding the market opportunity for the test is about $1 billion.

On the ongoing patent litigation related to BRCA1 and BRCA2 genes, he said that oral arguments are anticipated to be heard in mid- to late-April with a decision reached by June 30.

"Myriad continues to believe that regardless of the court's decision, we have strong proprietary intellectual property surrounding BRACAnalysis," he said.

Lastly, Mark Capone, president of Myriad Genetic Labs, said that the company has returned the rights to the OnDose technology to Saladax Biomedical. The test is to help determine proper dosing of infusional 5-fluorouracil to patients. 5-FU is used to treat several types of cancers.

"While we continue to believe the market potential for OnDose, the opportunity costs, including prospective clinical studies relative to our anticipated returns did not meet our return on investment threshold," Capone said.

Net income in the fiscal second quarter improved to $35.0 million, or $.42 per share, from $28.3 million, or $.33 per share, a year ago, and outpacing the consensus analyst estimate of $.38.

Myriad beefed up its R&D spending in the quarter 38 percent to $14.1 million from $10.2 million a year ago, while it increased SG&A spending 17 percent to $59.6 million from $51.0 million.

During the quarter Myriad purchased 1.3 million shares of it common stock for $33.7 million. To date, the company has bought back a total of $500 million of its stock under its current buyback program, CFO Jim Evans said on the call, and on Tuesday the company announced that its board has approved a new $200 million stock buyback program.

The company finished the quarter with $468.3 million in cash, cash equivalents, and marketable investment securities.

For full-year 2013, the company raised the lower end of it revenue guidance from an earlier guidance. It now expects revenue to be in the range of $575 million to $585 million, up from a previous range of $570 million to $585 million. EPS guidance was also revised to a new range of $1.55 to $1.58 from an earlier range of $1.50 to $1.55.

Shares of Myriad Genetics were down 1 percent at $26.86 in Wednesday morning trade on the Nasdaq.

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