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Myriad Genetics Reports Financial Results For Third Quarter Of Fiscal Year 2014

Stocks in this article: MYGN

SALT LAKE CITY, May 6, 2014 (GLOBE NEWSWIRE) -- Myriad Genetics, Inc. (Nasdaq:MYGN) today announced financial results for the fiscal third quarter and nine months ended March 31, 2014, increased its fiscal year 2014 guidance, and provided an update on recent business highlights. Revenue for the third quarter was $182.9 million, a 17 percent increase over the same period in the prior year. Third quarter GAAP earnings per diluted share were $0.48, which included a $12.6 million one-time, non-cash expense associated with the purchase of Crescendo Bioscience, Inc. during the quarter and a $1.2 million non-cash amortization of acquired intangible assets. Excluding these non-cash charges, third quarter adjusted earnings per diluted share were $0.60, a 30 percent increase over the same period in the prior year. A reconciliation of GAAP to adjusted earnings per diluted share is provided in the financial section of this earnings release.

"Myriad continued to deliver double digit top and bottom line growth in the third quarter which reflects the continued success of our business strategy," said Peter D. Meldrum, president and CEO of Myriad. "More importantly, we are well positioned to grow our business in the future, deliver long-term value for shareholders, and achieve our goal of building the leading global molecular diagnostic company focused on providing exceptional patient care across all major human diseases."

Fiscal Third Quarter 2014 Results

  • Molecular diagnostic testing revenue in the third quarter rose to $176.2 million, an increase of 19 percent compared to the third quarter of 2013. Women's Health revenue totaled $80.7 million, an increase of 53 percent over the same period in the prior year. Oncology revenue was $92.4 million, compared to $95.8 million in the third quarter of 2013. This $3.4 million year-over-year decline resulted from a $6 million decrease in the Medicare reimbursement rate for BRAC Analysis ® that took effect January 1, 2014. Effective April 1, 2014, Medicare increased the reimbursement rate for BRAC Analysis by 37 percent.
    • Revenue from Myriad's hereditary cancer tests totaled $169.6 million, an increase of 16 percent over the same quarter in the previous year. In this segment, BRAC Analysis revenue was $119.7 million, BART™ revenue was $21.1 million, Myriad myRisk™ Hereditary Cancer revenue was $14.5 million, and Colaris ® and Colaris AP ® revenue was $14.4 million.
    • Revenue from Myriad's other molecular diagnostic tests was $3.5 million, an increase of 25 percent compared to the previous year.
    • Revenue from the recent Crescendo acquisition that closed on February 28, 2014, was $3.1 million in the fiscal third quarter, which represented one month of revenue.
    • Companion diagnostic service revenue in the fiscal third quarter was $6.7 million, a 17 percent decrease over the same period in 2013. Companion diagnostic service revenue is expected to fluctuate from quarter to quarter due to the timing of research projects with our pharmaceutical partners.
  • Operating income was $55.3 million in the third quarter; however, excluding the non-cash charges associated with the Crescendo acquisition, adjusted operating income was $69.1 million, an increase of 19 percent over the same period in the prior year.
  • Net income was $36.8 million in the third quarter; however, excluding the non-cash charges associated with the Crescendo acquisition, adjusted net income was $46.2 million, an increase of 21 percent over the same period in the prior year.
  • During the quarter, the Company repurchased 1.6 million shares or $41.9 million of common stock under its stock repurchase program. Fiscal third quarter diluted weighted average shares outstanding were 76.4 million compared to 82.4 million in the same period last year.
  • The Company ended the quarter with $277.7 million in cash, cash equivalents and marketable investment securities compared to $462.3 million at March 31, 2013. The $184.6 million decline in total cash balances is primarily due to the repurchase of $243.6 million worth of company stock over the last four quarters and the use of $245 million in net cash associated with the Crescendo acquisition.

Year-to-Date Performance

  • Total revenue for the first three quarters of fiscal 2014 was $589.5 million, an increase of 34 percent over the $439.1 million reported for the first nine months of fiscal 2013.
  • Operating income was $221.2 million for the first nine months of fiscal year 2014; however, excluding the non-cash charges associated with the Crescendo acquisition, adjusted net operating was $235.4 million, an increase of 45 percent over the same period in the prior year.
  • Net income was $142.6 million for the first nine months of fiscal year 2014; however, excluding the non-cash charges associated with the Crescendo acquisition, adjusted net income was $152.5 million, an increase of 47 percent over the same period in the prior year.
  • GAAP diluted earnings per share were $1.82 for the first nine months of fiscal year 2014; however, excluding the non-cash charges associated with the Crescendo acquisition, adjusted, diluted earnings per share were $1.95, an increase of 57 percent over the same period in the prior year.

Business Highlights

  • Myriad entered into a three-year contract with United Healthcare to provide coverage for Myriad's myRisk Hereditary Cancer test. The contract also provides myRisk update testing for patients who have previously received one of Myriad's single cancer tests and want the more comprehensive assessment provided by the 25-gene myRisk test.
  • Myriad submitted the first module of a premarket approval application (PMA) to the FDA for use of its BRAC Analysis test as a companion diagnostic for olaparib ®, AstraZeneca's novel PARP inhibitor. AstraZeneca recently announced that it has received priority review status from the FDA for olaparib with a PDUFA date of October 3, 2014 setting up a potential FDA approval for olaparib in late calendar year 2014. Additionally, AstraZeneca also announced the initiation of three Phase 3 clinical trials in breast cancer with a planned NDA filing for metastatic breast cancer in 2016.
  • Myriad completed the acquisition of Crescendo Bioscience, a global leader in autoimmune diagnostics for $270 million. Crescendo's Vectra DA test is the only molecular diagnostic product on the market that assesses rheumatoid arthritis disease activity and provides rheumatologists with critical information that can be used to more effectively treat RA patients.
  • Myriad expanded its collaboration with Tesaro incorporating the use of Myriad's proprietary HRD test to identify tumor subtypes that may respond to Tesaro's investigational new PARP inhibitor niraparib. This agreement represents the fifth commercial companion diagnostic collaboration with the Company's HRD test.
  • Myriad RBM and the Institut Pasteur published a landmark study of immune response in the journal Immunity that provided new insights into healthy human immune system response. The study utilized Myriad RBM's proprietary TruCulture ® blood culturing and collection system to characterize individual immune responses to relevant medical stimuli.
  • The National Cancer Comprehensive Network (NCCN) revised its medical guidelines for hereditary colon cancer screening. The new guidelines use risk-based criteria to identify patients who are appropriate for testing, which should significantly increase the eligible testing population for hereditary colon cancer. Additionally, the Society of Gynecological Oncologists also revised their guidelines to recommending that all ovarian and endometrial cancer patients be tested for hereditary cancer risk.
  • Myriad published a clinical utility study on Prolaris ® that demonstrated 65 percent of patients diagnosed with prostate cancer had their treatment plans changed from their physician's original recommendations based upon their Prolaris test results. Myriad submitted this data as part of its dossier for Medicare reimbursement.

Increased Fiscal Year 2014 Outlook

Myriad is raising its revenue expectations for the fiscal year ending June 30, 2014 to $770 to $775 million, compared to previous guidance of $740 to $750 million. This new guidance represents 26 percent revenue growth when compared to the prior fiscal year. The non-GAAP financial guidance discussed below reflects certain non-cash charges associated with acquisitions to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures. We believe this will provide investors with additional information that may be useful in analyzing the Company's past and future operating performance. The Company is projecting adjusted diluted earnings per share of $2.37 to $2.40 compared to previous guidance of $2.09 to $2.12. The new guidance represents 34 to 35 percent EPS growth relative to the adjusted diluted earnings per share of the prior fiscal year.

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