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Myriad Genetics Q1 Revenues Shoot up 52 Percent; Angelina Jolie Effect Cited

NEW YORK (GenomeWeb News) – Myriad Genetics said after the close of the market on Tuesday that revenues for the first quarter of its Fiscal Year 2014 grew 52 percent year over year, aided by publicity surrounding Angelina Jolie's use of the BRACAnalysis test.

The Salt Lake City-based company posted revenues of $202.5 million for the three months ended Sept. 30, up from $133.4 million a year ago, and topping the average analyst estimate of $167.6 million.

Molecular diagnostic testing revenues increased 52 percent year over year in the quarter to $193.0 million, Myriad said. The oncology segment within molecular diagnostics was up 30 percent to $108.3 million, while women's health rose 93 percent to $84.7 million.

BRACAnalysis revenues, which made up about 74 percent of total revenues in the quarter, increased 43 percent to $149.6 million, Myriad said, while BART testing jumped 225 percent to $24.8 million.

Colaris and Colaris AP test revenues were up 19 percent at $14.3 million, while other molecular diagnostic tests in Myriad's portfolio climbed 66 percent to $4.3 million.

Companion diagnostic service revenues increased 54 percent to $9.5 million.

In May, Jolie disclosed that she had undergone a preventive double mastectomy after test results from BRACAnalysis determined she carries a mutation in her BRCA1 gene that increases her chances of developing breast and/or ovarian cancer.

On Myriad's conference call after the release of the company's financial results on Tuesday, Marc Capone, president of Myriad Genetic Laboratories, said that the impact of the publicity surrounding Jolie increased total revenues by about $35 million during the quarter. Excluding the Jolie impact, company-wide revenue growth would have been 25 percent year over year, the company estimated.

During the summer, the US Supreme Court invalidated some claims on patents assigned to Myriad covering its BRACAnalysis test. Following the ruling, several firms launched their own BRCA1 and BRCA1 tests, including Ambry Genetics, Gene by Gene, GeneDx, and Quest Diagnostics. Capone said on the call that Myriad lost an estimated $5 million in the fiscal first quarter, or 3 percent of market share, due to the increased competition.

"In future quarters, we believe this impact may increase modestly as additional competitors enter the market. However, we are confident the vast majority of physicians and patients will continue to utilize our test because of the major quality, turnaround time, and service advantages Myriad has to offer," Capone said.

In early September, the company launched its myRisk Hereditary Cancer panel on a limited basis. Myriad plans to replace BRACAnalysis completely with myRisk by 2015. On the call Myriad President and CEO Peter Meldrum noted, however, that BRACAnalysis still has value as a companion diagnostic test.

"While we believe the hereditary cancer market will rapidly shift to myRisk, we continue to believe that BRACAnalysis will enjoy strong demand as a companion diagnostic for PARP inhibitors and possibly DNA-damaging agents," he said.

Meldrum also noted that Myriad's international division saw a 125 percent increase in revenues year over year, though he declined to provide a dollar figure, saying that the firm does not normally do so until a segment or business achieves at least a 5 percent share of Myriad's total revenues.

Growth drivers moving ahead in Europe, he said, include regulatory approval of AstraZeneca's PARP inhibitor, which represents a $100 million companion diagnostic market opportunity, and the European launch of the myRisk test, slated to occur in the second half of FY 2014.

The company posted a profit of $55.5 million, or $.68 per share, during the fiscal first quarter, up from a profit of $30.1 million, or $.36 per share. Wall Street had expected, on average, EPS of $.46.

Its R&D spending in the recently completed quarter of $16.8 million was up 47 percent from $11.4 million a year ago. SG&A costs rose 38 percent to $77.3 million from $56.1 million.

Myriad ended the quarter with $515.6 million in cash, cash equivalents, and marketable securities.

The firm said that it repurchased 3.8 million shares, or $102.3 million, of its common stock during the quarter, and its board of directors has authorized a new $300 million stock repurchase program, expanding the total share buyback program to $1 billion.

For Fiscal Year 2014, the company is raising its revenue expectations to a range of $700 million to $715 million, up from a previous guidance of $690 million to $710 million. EPS for FY 2014 was also increased to a new range of $1.92 to $1.97 from a previous range of $1.87 to $1.94.

Meldrum also noted on the call that Myriad will make a decision on possibly buying Crescendo Biosciences during Fiscal Year 2014. In 2011 Myriad made a $25 million investment into Crescendo and secured an option to purchase the firm. Crescendo offers the Vectra DA test for rheumatoid arthritis.

"We continue to have a high degree of confidence in our ability to compete in our core markets while diversifying our business both through new product introductions and international expansion as we look to drive future growth and long-term shareholder value," Meldrum said in a statement.

Shares of Myriad were up nearly 2 percent at $25.62 in Wednesday morning trade on the Nasdaq.