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Myriad Reports 31 Percent Jump in Q4 Revenues

NEW YORK (GenomeWeb News) – Myriad Genetics reported after the close of the market Tuesday that its fourth quarter revenues climbed 31 percent year over year partially driven by a 19 percent increase in revenue for its flagship BRACAnalysis test.

The Salt Lake City-based molecular diagnostics firm brought in total revenues of $174.1 million for the three months ended June 30, compared to revenues of $133 million for the fourth quarter of 2012. It beat the consensus Wall Street estimate for revenues of $159.9 million.

Its molecular diagnostic testing revenue was $166.1 million, a 30 percent jump compared to $127.5 million for the fourth quarter of 2012. Its companion diagnostics services revenue increased 45 percent to $8 million from $5.5 million.

Products in Myriad's oncology segment contributed $100.2 million, a 19 percent increase over the year-ago period in 2012. Revenue from the women's health segment totaled $65.8 million, representing 51 percent growth over the fourth quarter of last year.

The BRACAnalysis test, which comprised 74 percent of total revenues during the fourth quarter, brought in $129.6 million. Revenue from the firm's BART test soared by 310 percent compared to the comparable period last year to $18.8 million, while its Colaris and Colaris AP tests garnered $14.5 million, a 26 percent jump from Q4 2012. Meanwhile, Myriad's other molecular tests brought in $3.1 million, a 16 percent increase from the fourth quarter of 2012.

During the quarter, Myriad submitted its Investigational Device Exemption to the US Food and Drug Administration for the use of BRACAnalysis as a companion diagnostic test for a Phase III study involving AstraZeneca's PARP inhibitor olaparib. "AstraZeneca is planning on conducting multiple Phase III studies in collaboration with Myriad for a variety of cancers including breast, ovarian, lung, and gastric cancer," the company said in a statement.

Myriad also announced a new CDx agreement with Tesaro for its PARP inhibitor, niraparib, making its sixth collaboration with pharma around a PARP inhibitor product.

Myriad's net income for the fourth quarter was $44.1 million, or $.53 per share, compared to $29.1 million, or $.34 per share, for Q4 2012. It easily beat analysts' consensus estimate for EPS of $.44.

The firm's R&D expense during the quarter was $14.6 million, up 21 percent from $12.1 million for the fourth quarter last year. Its SG&A spending jumped 26 percent to $71.5 million from $56.6 million.

The firm ended the quarter with $531.1 million in cash, cash equivalents, and marketable investment securities, representing a 17 percent increase year over year.

Myriad CEO Peter Meldrum said in a statement that in fiscal year 2014 the company plans to launch three new tests, including the next-generation sequencing-based myRisk Hereditary Cancer panel; myPath Melanoma, and myPlan Lung Cancer. According to Meldrum, the company is also involved in a number of external collaborations, particularly in the area of companion diagnostics and personalized medicine that will bring in "long-term value" to shareholders.

Mark Capone, president of Myriad Genetics Laboratories, said on a conference call following the release of the financial results that the firm expects to launch the myRisk Hereditary cancer panel next month. Initially, it will target 250 physician thought leaders in marketing the test, with an aim of expanding enrollment later in the year and "complete conversion" by the summer of 2015.

Capone said the firm has completed multiple pivotal studies involving the myRisk test, and is planning to present the data at major medical conferences in the fall.

In addition, Capone noted that Myriad expects to receive Medicare coverage for its Prolaris prostate cancer test in the second half of its fiscal year 2014. Prolaris has been on the market for a few years, but Myriad has stepped up sales and marketing efforts over the past year as it completed hiring a 24-person sales force to drive sales of the test and has conducted numerous studies to demonstrate its effectiveness.

Myriad said it has completed the training set for myPath Melanoma and the data has been accepted for publication at the American Society of Dermatopathology in October. The firm also noted the initiation of a validation study for the myPlan Lung Cancer test and plans to present data from this study at a meeting this fall.

For fiscal year 2013 Myriad's revenues increased 24 percent year over year to $613.2 million from $496 million. This beat the consensus Wall Street estimate for revenues of $598.8 million.

Its net income for the year was $147.1 million, or $1.77 per share, up from $112.2 million, or $1.30 per share, for FY 2012. Myriad beat the consensus Wall Street estimate of $1.67.

Its R&D spending for the year increased 26 percent to $53.7 million from $42.6 million, and its SG&A expenses jumped 21 percent to $251.8 million from $208.4 million.

Myriad noted that during the fiscal year it repurchased 5.6 million shares of common stock for $146.3 million at an average weighted share price of $25.97.

"While the company received a benefit from the recent celebrity publicity around breast cancer, the duration of this publicity benefit is likely to be short term," Meldrum said on the conference call. "Consequently for the purpose of this guidance we're assuming this tail wind will wane quickly. We have taken into consideration the recent emergence of competition into our core markets. Based upon these two assumptions we are forecasting total revenue of $690 million to $710 million in fiscal 2014, which represents a 13 percent to 16 percent revenue growth compared to the 2013 fiscal year."

Investment bank Cowen and Co. downgraded Myriad's stock on Wednesday morning to Market Perform from Outperform, saying the stock looks "reasonably valued on a multiple basis." Cowen has a $31 price target on Myriad's shares.

Goldman Sachcs maintained its Neutral rating on Myriad's stock but upped its price target to $31 from a previous $29.

In Wednesday morning trade on the Nasdaq, shares of Myriad were down 6 percent at $28.42.

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