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Myriad Genetics Acquires Gateway Genomics as Q3 Revenues Drop 7 Percent, Miss Estimates

NEW YORK – Myriad Genetics reported on Tuesday that its third quarter revenues fell 7 percent year over year primarily due to currency translations and change of estimates in diagnostic test cash collection, and non-recurring milestone payments.

The Salt Lake City-based company also announced the $67.5 million acquisition of consumer genetics company Gateway Genomics and its SneakPeek Early Gender DNA Test, designed to reveal a baby's gender at six weeks into pregnancy with 99 percent accuracy.

For the three months ended Sep. 30, Myriad had $156.4 million in revenues, down from $167.3 million in the same period last year, and falling shy of analysts' consensus estimate of $170.1 million.

In addition to a non-recurring milestone payment, the company said that Q3 revenues were impacted by $3.3 million in currency translations and change of estimates amounting to $5.3 million.

Third quarter testing volumes grew 12 percent year over year, driven mainly by Myriad's pharmacogenomics business. Revenues for this business, which include the GeneSight test, grew 37 percent to $33 million from $24.1 million.

Hereditary cancer, prenatal, and tumor profiling revenues, meanwhile, fell year over year by 11 percent, 6 percent, and 6 percent, respectively.

Myriad reported a net loss of $35.1 million, or $.43 per share, for the quarter compared to net income of $24.6 million, or $.30 per share, a year ago. Adjusted net loss per share of $.19 came in below analysts' consensus estimate of a loss per share of $.06.

The company ended the quarter with $110.7 million in cash and cash equivalents and $82.5 million in marketable investment securities.

Myriad acquired Gateway for an upfront cash payment of $67.5 million, subject to customary adjustments. Gateway may earn up to $32.5 million in cash payments in 2023 and 2024, pending the achievement of performance-based milestones.

The SneakPeek test kit includes the SneakPeek Snap device, which offers mothers an automated way to collect blood samples from their arm at home, which they then mail to Gateway.

Myriad sad that Gateway has sold more than 750,000 SneakPeek tests to date, and that Gateway's projected 2022 revenues are approximately $20 million. The business is expected to grow more than 20 percent compounded over the next three to five years, excluding synergies, and be accretive to Myriad's business in 2024.

In early Tuesday trading on the Nasdaq, shares of Myriad were down nearly 15 percent at $17.67.

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