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Myriad's Prolaris Gets Draft LCD; High Demand for myRisk Leads to Lower Q1 Revenue Expectations

NEW YORK (GenomeWeb) – Medicare contractor Palmetto GBA has issued a draft local coverage determination (LCD) for Myriad Genetics' Prolaris prostate cancer test.

Palmetto has been proactively issuing draft LCDs for multi-analyte molecular diagnostics, and issued three of them over the summer. Recently, the Centers for Medicare & Medicaid Services finalized two of those LCDs, for MDxHealth's ConfirmMDx prostate cancer test and for BioTheranostics' Breast Cancer Index.

The LCD for Myriad's Prolaris lays out certain terms under which Medicare will pay for testing. Myriad believes the draft LCD language would enable 50 percent of low- and very low-risk prostate cancer patients to be covered for testing.

Prolaris gauges the expression of 45 genes and assesses prostate cancer patients' risk of disease progression. The draft LCD will now be open for public comment for at least 45 days, after which CMS will issue a final LCD. The final version goes into effect after a 45-day notification period.

In addition to the news of the draft LCD release for Prolaris, Myriad announced that sample volumes for its myRisk Hereditary Cancer test "have rapidly increased, exceeding company expectations." The 25-gene next-generation sequencing test gauges the risk of eight hereditary cancers, including melanoma, and colon, ovarian, endometrial, pancreatic, prostate, and gastric cancers. Myriad has been working to transition all customers for its older, individual cancer risk tests, including BRACAnalysis, on to myRisk by next summer.

Samples volumes for myRisk currently comprise 50 percent of all hereditary cancer samples the company is receiving. However, due to the rapid transition of the test into the market and higher than anticipated physician demands Myriad incurred increases in costs and turnaround time to perform myRisk in the first fiscal quarter ended Sept. 30.

The longer turnaround time for myRisk "translated into increased work-in-progress … and a corresponding decrease in revenue that was not anticipated when Myriad issued its fiscal year 2015 financial guidance in August," the company said. To address the demand for myRisk, Myriad is hiring additional staff and purchasing more equipment.

Myriad adjusted its first quarter revenue projection to $168 million and adjusted earnings per share of approximately $0.25. This is below the consensus analysts' estimate for revenues of $183.5 million and EPS of $.41 for the quarter. The company, however, maintained its financial guidance for FY 2015 for total revenues of between $800 million to $820 million, and adjusted EPS of $1.90 to $2.00.

In Friday morning trade on the Nasdaq shares of Myriad were down nearly 7 percent at $35.27.