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Myriad Genetics' Q4 Revenues Increase 14 Percent

NEW YORK (GenomeWeb News) – Myriad Genetics reported after the close of the market on Tuesday that its fiscal fourth-quarter revenues increased 14 percent year over year, with its BRACAnalyis test revenues up 12 percent.

For the three months ended June 30, total revenues climbed to $107.4 million, compared to $93.9 million, exceeding analyst expectations of $104.4 million.

Revenues from molecular diagnostics increased to $105.4 million, up 12 percent from $93.9 million as oncology revenues rose 11 percent year over year to $74.7 million, and Women's Health revenues increased 15 percent to $30.6 million.

The BRACAnalysis test, which represents 86 percent of total revenue for the fourth quarter, generated $92.8 million, up from $82.5 million a year ago.

Of its other tests, Colaris and Colaris AP test revenues inched up 3 percent to $7.6 million from $7.4 million a year ago, and revenues from Myriad's six remaining molecular diagnostic tests totaled $4.9 million, a 21 percent jump year over year.

In a conference call following the earnings results, Myriad CFO James Evans said that Colaris revenues during the quarter were affected by a delay in orders in anticipation of the company's launch of "a more robust" four-gene panel version of the test in June.

"Demand for the Colaris product has increased after the product update was completed and we expect Colaris to return to growth levels seen earlier in the year," Evans said.

Myriad also posted companion diagnostic revenues of $2 million for the quarter, compared to none a year ago, as a result of its purchase of Rules-Based Medicine in May.

Its R&D spending in the quarter rose 74 percent to $9.2 million from $5.3 million, and SG&A costs climbed 10 percent to $43.9 million from $39.8 million.

Myriad recorded a profit of $26 million, or $.30 per share, for the quarter, down 51 percent from $53.2 million, or $.54 per share, a year ago, but still edged out analyst estimates of $.29 per share.

The company said that net income for the quarter included a $16.1 million income tax expense recorded for accounting purposes. The year-ago figure includes no tax expense and a one-time income tax benefit of $14.6 million.

Myriad CEO Peter Meldrum said on the call that the firm is progressing on its international expansion and is equipping, staffing, and certifying its laboratory in Munich. The lab, he said, is on track to begin receiving samples and generating revenues in 2012, one year ahead of schedule.

Myriad is also working with distributors to expand its presence in Latin America and Asia, he added.

On the product pipeline front, he said that the next test to be launched will be based on technology licensed from Melanoma Diagnostics. Myriad plans to launch the test during fiscal 2012 "and believes this product will assist [dermatology] pathologists in determining whether or not a skin lesion is cancerous or benign," Meldrum said. Current pathology analysis is unable to determine malignancy in about 10 percent of the 3 million skin biopsies performed in the US annually "and this test could provide a molecular answer for physicians that would improve the healthcare management of their patients," he added.

Last month the US Federal Circuit Court of Appeals ruled partially in favor of Myriad when it determined that the patenting of genes is allowable under US law. The federal court ruled, however, that five of the six method claims that were being contested by the ACLU are not patentable. Meldrum today sought to downplay that part of the ruling by saying that those claims are "very broad in nature as is typical in patent drafting.

"Fortunately we have additional specific method claims covering essentially the same patentable subject matter that remain in full force and effect," Meldrum said. He added that Myriad has more than 230 method claims covering transformative processes that were not affected by the federal court's ruling and which remain in place.

"Today our intellectual property protection for BRACAnalysis is as strong as it was before the ACLU brought suit against Myriad," Meldrum said.

For full-year fiscal 2011, revenues were up 11 percent to $402.1 million from $362.6 million, beating analyst forecasts of $399.3 million.

Molecular diagnostic revenues totaled $400 million, up 10 percent from $362.6 million a year ago. Oncology revenues comprised $283.1 million, a 9 percent increase year over year, and Women's Health revenue increased 15 percent to $116.7 million.

Companion diagnostic revenues totaled $2 million compared to zero a year ago.

BRACAnalysis test revenues grew 10 percent to $353 million from $319.8 million in fiscal 2010. Revenues from Colaris and Colaris AP increased 7 percent to $29.2 million from $27.4 million, and revenues from the company's remaining six molecular diagnostic tests increased almost 16 percent to $17.9 million.

Profits for the year slipped to $100.7 million, or $1.10 per share, down 34 percent from $152.3 million, or $1.54 per share in full-year 2010. Wall Street estimates were for $1.09 a share.

The 2011 figure includes a $58.9 million income tax expense recorded for accounting purposes, Myriad said, while the year-ago figure had no tax expense and a one-time income tax benefit of $11.5 million.

Myriad spent $27.8 million on R&D for the year, up 27 percent from $21.9 million. Its spending on SG&A rose to $169.8 million, up 5 percent from $161.4 million.

The company finished 2011 with $417.3 million in cash, cash equivalents, and marketable investment securities.

Myriad gave guidance for 2012 of between $445 million and $465 million in revenues, resulting in EPS of between $1.20 and $1.25.

Shares of Myriad on the Nasdaq were down about 3 percent to $18.48 in early morning trading.

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