Myriad Genetics (MYGN)

Q4 2011 Earnings Call

August 09, 2011 4:30 pm ET


Peter Meldrum - Chief Executive Officer, President and Director

Rebecca Chambers -

James Evans - Chief Financial Officer, Principal Accounting Officer and Treasurer

Mark Capone - President of Myriad Genetic Laboratories Inc


Scott Gleason - Stephens Inc.

Dane Leone - Macquarie Research

Charles Duncan - JMP Securities LLC

Tycho Peterson - JP Morgan Chase & Co

Michael Yee - RBC Capital Markets, LLC

Doug Schenkel - Cowen and Company, LLC

Unknown Analyst -

Jon Wood - Jefferies & Company, Inc.



Ladies and gentlemen, thank you for standing by, and welcome to the Myriad Genetics 2011 Financial Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded, Tuesday, August 9, 2011. I would now like to turn the conference over to Rebecca Chambers, Director of Investor Relations. Please go ahead, ma'am.

Rebecca Chambers

Thank you, Lindsay. Good afternoon, everyone, and welcome to the Myriad Genetics Fourth Quarter and Fiscal Year 2011 Earnings Call. During the call, we will review the financial results we've released today and detail the strategic directives, which will guide the company on fiscal 2012, after which we will host a question-and-answer session. If you had not had a chance to review the earnings release, it can be found in the Investor Relations section of our website at

Presenting today will be Pete Meldrum, President and Chief Executive Officer; Mark Capone, President, Myriad Genetic Laboratories; and Jim Evans, Chief Financial Officer. This call can be heard live via webcast along with the slide presentation at The call is being recorded and will be archived along with the presentation in the Investors section of our website.

Please note that some of the information presented here today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management's current expectations and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q and its current report on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

With that, I'll now turn the call over to Pete.

Peter Meldrum

Thank you, Rebecca. To begin, I would like to provide highlights of our fourth quarter and full year results before introducing the company's strategic directives for fiscal 2012. I am pleased to report that fourth quarter revenues increased 14% year-over-year to a record $107.4 million. Fiscal 2011 revenues grew 11% to $402.1 million as compared to $362.6 million in the last fiscal year. These financial results contributed to a record of consistently delivering annual double-digit revenue growth now for the 12th consecutive year.

Additionally, Myriad's full year profitability increased to an impressive 17% year-over-year with operating income of $157.8 million. These strong results have positioned us well for continued success, particularly when combined with the strategic investments we are making for future growth. We continue to increase investments in our research and development programs in an effort to discover and develop exciting new products and also to enhance the clinical support for our current product portfolio. In addition, we have been strategically deploying capital with the in-licensing of novel technologies from Chronix Biomedical and the Melanoma Diagnostics and the acquisition of Rules-Based Medicine in addition to repurchasing over $200 million of our stock this year.

Now I'd like to move on to the company's expectations for fiscal 2012. We expect total revenues of $445 million to $465 million. This level of revenue is expected to result in fully diluted earnings per share of $1.20 to $1.25. Jim will speak more to the specifics of our guidance later on in the call. This compelling outlook will require a focus on executing our 3 strategic directives for long-term revenue growth: Grow existing products and markets, develop an international presence and invest in new products and capitalize on the companion diagnostic opportunity.

Shortly, Mark will discuss our strategy to recognize the full potential of our current product portfolio, and I will focus my remaining comments on our European operations and investing in our product pipeline to fuel innovative product introductions and revenue growth for years to come.

I will begin by providing a brief update of our international expansion to Europe. We are making excellent progress completing, equipping, staffing and certifying our laboratory in Munich and are on track to begin receiving samples and generating revenues in January 2012, 1 year ahead of schedule. We are also working with distributors to expand our presence in Latin America and Asia. We view this international expansion as an exciting growth opportunity for Myriad and are working aggressively to make it a reality.

As I previously shared with you, we have made it a priority to increase our internal investment in research and development to continue to deliver new transformative molecular diagnostic products, which assess a person's risk of disease, guide treatment decisions and help improve a patient's quality of life. Additionally, the 2 licensing deals and the acquisition of Rules-Based Medicine have augmented our already strong product pipeline. Our strategy is to aggressively pursue a combination of internal development, technology in-licensing and acquisitions to grow our business in the future. And we, therefore, expect to further increase our investment in this area in fiscal 2012.

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