NEW YORK – Despite missing analysts' estimates in the third quarter and lowering its full-year revenue guidance, Myriad Genetics maintains a positive outlook on future growth starting in 2023.
In a call with investors following release of its Q3 earnings, Myriad President and CEO Paul Diaz said that the company is positioning itself for 9 percent to 12 percent "organic revenue growth," though he did not specify a time frame for this. The anticipated growth is expected to be driven in part through rising test volumes, planned product launches, and the strategic acquisition of Gateway Genomics, and positive reimbursement developments around its tests.
Nicole Lambert, the company's chief operating officer, said that in Q3 the Centers for Medicare and Medicaid Services have preliminarily agreed to crosswalk GeneSight, the company's pharmacogenomics test for estimating patient responses to several psychiatric medicines, to PLA code 0175U.
Diaz added that Myriad is engaged in several discussions around value-based contracting with various states with respect to GeneSight.
"We're also advancing discussions with the VA on the heels of the Prime study," he said, "where there's a tremendous amount of interest, given the mental health challenges of our veterans."
GeneSight sales achieved its highest quarterly volumes this quarter, growing 34 percent over the same period last year, and continuing its upwards growth in the face of declining overall revenue seen last quarter.
Diaz said that the company also expects to drive growth through the launches of FirstGene, a combined noninvasive prenatal screening and carrier screening test, and a liquid biopsy technology for tumor profiling, both planned for next year.
"We expect FirstGene will make a significant impact on the prenatal care of our patients," Diaz said. "FirstGene is complementary to our current prenatal portfolio and targets a market of over 1 million patients in the US."
Myriad is preparing FirstGene's commercial launch for the second half of 2023.
Year over year, third quarter prenatal testing volume growth was flat and revenues fell by 6 percent, facing headwinds from factors including a stronger US dollar and the state of California's recent rollout of its revised prenatal screening program.
The Superior Court of California last week granted Myriad, along with BillionToOne and Laboratory Corporation of America, an injunction preventing the state from enforcing a new regulation barring those companies from conducting trisomy screening in California until the case is settled.
The new tumor profiling liquid biopsy launch that Diaz mentioned is planned for that same time period, as an addition to the suite of tools available through Myriad's Precise Oncology Solutions platform.
Diaz said on the call that this new biopsy will enable the company's provider partners to "benefit from an overall ease of use and a better understanding of results."
Myriad furthermore sees growth potential in its acquisition of personal genomics firm Gateway Genomics. Asked about that deal in the investor call, Diaz said that it represents a "significant opportunity to re-energize our engagement with Ob/Gyn and others."
Diaz noted that little overlap exists between Gateway's approximately 1,850 commercial customers and Myriad's approximately 7,500 such customers.
He also noted that Gateway's internal data suggests that almost 60 percent of people accessing a SneakPeek Early Gender DNA Test also get integrated prenatal screening, in addition to using Gateway's information and education services.
Although Myriad narrowed its 2022 revenue guidance to between $668 million and $672 million, from a previous estimate of $670 million to $700 million, Myriad CFO Bryan Riggsbee stated that Myriad expects revenue to perform "consistent with historical seasonal trends with a soft third quarter followed by a sequential increase in the fourth quarter."
Riggsbee also said that the company is increasing its adjusted operating expense guidance by approximately $10 million to reflect inflation and incremental investments. The updated guidance also reflects an approximately 8 percent year over year increase from fiscal year 2021 total operating expenses, excluding domestic businesses.
"Our cash balance, along with having no debt and access to capital markets, provides us with a strong capital position," Riggsbee said.