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Myriad Genetics' Q3 Revenues up 13 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Myriad Genetics said after the close of the market on Tuesday that sales of BRACAnalysis products drove its total revenues up 13 percent year over year in its fiscal third quarter.

Revenues for Myriad during the three months ended March 31 totaled $102.4 million, compared to $90.8 million a year ago, exceeding consensus Wall Street forecasts for $98.2 million in revenue.

The bulk of the Salt Lake City firm's revenues came from its BRACAnalysis products, and during the quarter sales for those products rose 13 percent to $90.3 million from $79.8 million a year ago. Colaris and Colaris AP products grew 7 percent year over year to $7.4 million, Myriad said, while its six remaining products climbed 14 percent to $4.7 million.

Oncology revenues increased almost 14 percent year over year to $73 million and Women's Health revenues increased 11 percent to $29.3 million. Myriad attributed the uptick in both segments to sales and marketing efforts that increased acceptance of its products within the medical community.

The firm's net income for the quarter slid to $27.9 million, or $.31 per share, from $33.3 million, or $.33 a share from a year ago. On a non-GAAP pre-tax basis, EPS for the fiscal third quarter came in at $.47, compared to $.35 a year ago.

Analysts had expected EPS of $.25.

During the quarter, Myriad recorded $14.4 million in income tax expense for accounting purposes.

The company increased spending for R&D to $6.7 million, a 14 percent increase from $5.9 million during the fiscal third quarter of 2010. Its SG&A spending rose to $42.8 million, up 5 percent from $40.8 million.

As of March 31, the company had $451.5 million in cash, cash equivalents, and marketable investment securities.

On a conference call following the earnings release, James Evans, Myriad's CFO, said the firm is increasing its full-year 2011 revenue guidance to between $396 million and $402 million from $380 million to $395 million. EPS guidance was raised to between $1.06 and $1.09 from $.95 and $1.

Last week, Myriad announced plans to buy Rules-based Medicine for $80 million, and during the call Myriad President and CEO Peter Meldrum said that three factors drove the acquisition, including a strong product pipeline in neuroscience disorders, infectious diseases, and inflammatory diseases, "which will facilitate the extension of Myriad's commercial focus beyond oncology."

Also, RBM has collaborations with more than 20 major pharmaceutical and biotechnology companies and provides custom assay development and companion biomarker discovery to a number of pharmaceutical firms, such as Bayer, Merck, Johnson & Johnson, Pfizer, and Roche.

"Importantly, through these collaborations, RBM has obtained companion diagnostic rights to many of the drugs under development," Meldrum said, adding that the deal would give Myriad access to patient samples with outcome data from multiple disease indications.

And lastly, RBM's proprietary immunoassay technologies and access to patient samples enhance Myriad's own capabilities in nucleic acid biomarker discovery. The combination of the two firms' technologies should accelerate Myriad's discovery and development of molecular diagnostic products, Meldrum said.

Its purchase of RBM, which is expected to close on or before May 31, is expected to be accretive to Myriad in two years, Meldrum added.

On its plans to expand into Europe, Gary King, executive vice president of international operations for Myriad, said on the call that after an evaluation of the market, the company has targeted France, Germany, Italy, Spain, and Switzerland for its initial entry into that market.

Myriad will build its own central laboratory in Munich, Germany after evaluating more than 150 distributors and laboratory companies but failing to find a potential partner that could provide "broad coverage, clinical expertise, or significant near-term revenue," he said.

Direct education and sales and marketing teams will be created in Myriad's target countries, he said, while the company's European headquarters will be in Switzerland, where it will house management and administration. Myriad anticipates making its entry into Europe early next year, one year ahead of the company' original timeline, King said.

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