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Myriad Genetics' Q4 Revenues Rise 24 Percent; Ramp up of European Operations Continues

NEW YORK (GenomeWeb News) – Myriad Genetics reported after the close of the market Tuesday that revenues for its fiscal fourth quarter rose 24 percent year over year, beating the consensus Wall Street estimate.

The company also reported that revenues for full-year fiscal 2012 increased 23 percent year over year.

For the fourth quarter ended June 30, Myriad posted $133 million in revenues, up from $107.4 million a year ago, surpassing the average analyst estimate of $131.9 million. The Salt Lake City-based company said that molecular diagnostic testing generated $127.5 million in revenues, up 21 percent from a year ago, while companion diagnostic services revenues increased to $5.5 million from $2.0 million a year ago.

Myriad acquired the companion diagnostics business in May 2011 when it purchased Rules-Based Medicine.

Within molecular diagnostics, the Oncology segment had $87.0 million in revenues, a 16 percent improvement from a year ago while Women's Health tallied $40.5 million in revenues, up 32 percent year over year.

BRACAnalysis test revenues in the quarter totaled $108.7 million, up 17 percent year over year, while Colaris and Colaris AP test revenues came in at $11.5 million, a 51 percent increase from a year ago, the company said. The firm's other molecular tests posted $7.3 million in revenues in the quarter, a 47 percent increase year over year.

Its R&D costs increased 32 percent year over year to $12.1 million from $9.2 million, while SG&A costs rose 29 percent to $56.6 million from $43.9 million.

Myriad's profit in the quarter increased to $29.1 million, or $.34 per share, compared to $26.0 million, or $.30 per share, a year ago, and matching the consensus EPS estimate.

The company repurchased $61.0 million of shares during the quarter, it said.

For full-year fiscal 2012, Myriad's revenues increased 23 percent to $496.0 million from $402.1 million, and beat the Wall Street estimate of $494.50 million. Molecular diagnostic test revenues of $472.4 million were up 18 percent year over year from $400.1 million in 2011, while companion diagnostic revenues were up to $23.6 million from $2.0 million a year ago.

Oncology revenues totaled $327.6 million, up 16 percent from a year ago, and Women's Health revenues rose 24 percent year over year to $144.8 million. BRACAnalysis test revenues were $405.5 million, up 15 percent year over year, and Colaris and Colaris AP tests generated $43.3 million in revenues, up 48 percent year over year, Myriad said.

Other molecular tests climbed 32 percent year over year to $23.6 million in revenue in 2012.

The company spent $42.6 million on R&D during the year, up 53 percent from $27.8 million in 2011. Its SG&A spending was up 23 percent to $208.4 million from $169.8 million.

Myriad's profit in fiscal 2012 improved to $112.2 million, or $1.30 per share, from $100.7 million, or $1.10 per share, in 2011, even with the average analyst estimate.

For the full year, the company repurchased $128.5 million of its shares.

Myriad finished 2012 with $454.2 million in cash, cash equivalents, and marketable investment securities.

For fiscal 2013, the company projects revenues to fall between $550 million and $565 million, translating to EPS of between $1.44 and $1.48. On a conference call following the release of the firm's results, Myriad CFO James Evans said that molecular diagnostics is anticipated to bring in between $525 million and $537 million in revenues, while companion diagnostics is anticipated to bring in $25 million to $28 million.

Also on the call, Myriad President and CEO Peter Meldrum said that the company's international operations are expected to contribute revenues in 2013, though the contributions are not expected to be significant.

"We're excited about the progress made thus far in Europe as well as the future prospects for the region. Therefore, we will continue building out our infrastructure," in Germany, France, Italy, Spain, and Switzerland, he said.

The expansion will focus on sales and marketing, as well as clinical efforts. In total, 20 additional employees will be hired to support the European operations, Meldrum said, adding that the firm remains on track to see at least $50 million in revenues from its international business by 2016.

On the reimbursement front, Marc Capone, president of Myriad Genetics Laboratories, said that the focus is on the BRACAnalysis Large Rearrangement Test, or BART, and the Prolaris prostate cancer test.

The National Comprehensive Cancer Network has established new guidelines recommending large rearrangement testing for all breast and ovarian cancer patients who are appropriate for hereditary cancer testing. The updated guidelines are expected to have a positive effect on BART revenues for 2013, Capone said, and with the change to NCCN guidelines, "we hope to obtain reimbursement over the coming quarters from our top payers."

He noted that the intellectual property for BART extends until the year 2025.

During the fourth quarter, Myriad met with its top payers over reimbursement for Prolaris and the feedback was positive, "as they believe sufficient analytical and clinical validation has been completed," Capone said. Critical to obtaining reimbursement will be a decision by Medicare, and the company has submitted its dossier to a local carrier for review, Capone said.

On the M&A front, Meldrum said that Myriad has an "appetite for more" following the integration of last year's RBM deal. The company has a "relatively high hurdle" in terms of what it looks for in a possible purchase, "but we also have a lot of cash and want to take advantage of our leadership position in this market."

In Wednesday morning trade on the Nasdaq shares of Myriad were up a fraction of 1 percent at $25.55.

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