Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing
and precision medicine, today announced financial results for its
third quarter ended September 30, 2023. The Company also
provided an update on its business performance and 2023 financial
guidance.
"For the third quarter and year-to-date 2023, Myriad Genetics
generated revenue growth of 14% and 15% over the prior year
periods, respectively, excluding prior period collections1. In the
third quarter of 2023, we continued to gain share in hereditary
cancer testing, reporting a fifth consecutive quarter of volume
growth year-over-year, and saw an acceleration in growth in our
prenatal testing business, generating 20% year-over-year volume
growth, excluding our Sneakpeek Early Gender DNA Test," said
Paul J. Diaz, president and CEO, Myriad Genetics. “With industry
leading gross margins and diligent cash management, we believe we
have demonstrated our commitment to achieving profitability all
while growing the business. We also improved our financial
flexibility by expanding our credit facility. We remain confident
in our ability to achieve our goal of adjusted profitability by the
fourth quarter 2023 and sustainable 10%+ annual revenue growth for
this full year and beyond."
Financial and Operational Highlights:
- Test volumes of 356,000 in the third quarter of 2023 increased
40% year-over-year, or 18% excluding contributions from the
SneakPeek Early Gender DNA Test.
- The following table summarizes year-over-year quarterly testing
volume changes in the company's core product categories:
|
|
Three months endedSeptember 30,
2023 |
|
Nine months endedSeptember 30,
2023 |
|
Three months endedSeptember 30,
2022 |
|
Nine months endedSeptember 30,
2022 |
|
|
Year-over-Year |
|
Year-over-Year |
|
Year-over-Year |
|
Year-over-Year |
Product volumes: |
|
|
|
|
|
|
|
|
Hereditary cancer |
|
18 |
% |
|
20 |
% |
|
4 |
% |
|
(6 |
)% |
Tumor profiling |
|
(1 |
)% |
|
7 |
% |
|
3 |
% |
|
(4 |
)% |
Prenatal |
|
85 |
% |
|
78 |
% |
|
0 |
% |
|
(2 |
)% |
Pharmacogenomics |
|
19 |
% |
|
24 |
% |
|
34 |
% |
|
40 |
% |
Total |
|
40 |
% |
|
41 |
% |
|
12 |
% |
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Excluding contributions from the SneakPeek Early Gender DNA
Test:
- Prenatal testing volumes in the third quarter 2023 increased
20% year-over-year and was flat sequentially. In the second quarter
2023 prenatal testing volumes increased 12% year-over-year and 1%
sequentially.
- The following table summarizes year-over-year quarterly revenue
changes in the company's core businesses by product category:
|
Three months ended |
|
Nine months ended |
(in millions) |
September 30, 2023 |
|
September 30, 2022 |
|
% Change |
|
September 30, 2023 |
|
September 30, 2022 |
|
% Change |
Product revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer |
$ |
86.5 |
|
|
$ |
70.5 |
|
|
23 |
% |
|
$ |
238.9 |
|
|
$ |
220.6 |
|
|
8 |
% |
Tumor profiling |
|
30.2 |
|
|
|
30.8 |
|
|
(2 |
)% |
|
|
103.5 |
|
|
|
96.9 |
|
|
7 |
% |
Prenatal |
|
39.5 |
|
|
|
22.1 |
|
|
79 |
% |
|
|
111.3 |
|
|
|
87.3 |
|
|
27 |
% |
Pharmacogenomics |
|
35.7 |
|
|
|
33.0 |
|
|
8 |
% |
|
|
102.9 |
|
|
|
95.5 |
|
|
8 |
% |
Total |
$ |
191.9 |
|
|
$ |
156.4 |
|
|
23 |
% |
|
$ |
556.6 |
|
|
$ |
500.3 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
- Year-over-year revenue growth in the third quarter of 2023
reflects a $7.1 million change of estimate1 in the current quarter
versus $(5.3) million change of estimate1 in the third quarter of
2022, excluding these change of estimates1, third quarter 2023
revenue increased 14% year-over-year, and hereditary cancer testing
revenue increased 13% year-over-year.
- GAAP gross margins of 70.0% in the third quarter of 2023;
adjusted gross margins for the third quarter of 2023 was 70.4%, an
increase of 140.0 basis points from the second quarter of
2023.
- GAAP total operating expenses in the third quarter of 2023 were
$194.4 million. Adjusted operating expenses in the quarter were
$137.3 million.
- GAAP operating loss in the third quarter of 2023 was $60.1
million, which factors in an accrual related to the settlement of
the Ravgen litigation of which $5 million was paid on October 31,
2023, $5 million is payable on or before October 31, 2024, and
$2.75 million is payable on or before October 31, 2025. An
additional $21.25 million is contingent on whether Ravgen is
successful in resolving all outstanding patent re-examinations and
litigation. If payable, the contingent amount would be payable over
a five year period beginning no earlier than 2026. The adjusted
operating loss in the quarter was $2.2 million.
- Ended the third quarter of 2023 with $86.3 million in cash,
cash equivalents and marketable investment securities and $23.5
million available to draw under the asset-based credit facility, or
total liquidity of $109.8 million. In addition, in October 2023,
Myriad Genetics exercised its option to increase the maximum
principal amount of its asset-based credit facility by $25.0
million to a total of $115.0 million.
Business Performance and Highlights:
OncologyThe Myriad Genetics Oncology business
provides hereditary cancer testing, including the MyRisk®
hereditary cancer test for patients who have cancer. It also
provides tumor profiling products such as the myChoice® CDx
companion diagnostic test, the Prolaris® prostate cancer test,
Precise™ Tumor molecular profile test and the EndoPredict® breast
cancer prognostic test. The Oncology business delivered revenue of
$76.6 million in the third quarter of 2023.
- Third quarter hereditary cancer testing revenue and volumes in
Oncology grew 21% and 15% year-over-year, respectively.
- Prolaris continued to see healthy demand as third quarter
testing revenue and volumes grew 18% and 9% year-over-year,
respectively. UnitedHealthcare has recently issued a positive
medical policy covering Prolaris in the biopsy setting for all risk
groups. This policy will take effect on January 1, 2024.
- Announced a collaboration with Memorial Sloan Kettering Cancer
Center (MSK) to study the use of minimal residual disease (MRD)
testing in breast cancer. The research project will use Myriad
Genetics' MRD testing platform, a tumor-informed high-definition
assay that uses whole-genome sequencing to achieve high sensitivity
and specificity for circulating tumor DNA (ctDNA). Myriad Genetics'
MRD test was selected for its anticipated higher sensitivity and
specificity than many other ctDNA offerings.
- Integrated Absolute Risk Reduction (ARR) into the Prolaris
Prostate Cancer Prognostic Test to help patients and providers make
personalized treatment decisions regarding hormone therapy.
Prolaris is the only biomarker test to quantify the benefits of
adding androgen deprivation therapy (ADT) to radiation therapy
(RT)2.
Women’s Health
The Myriad Genetics Women’s Health business serves women of all
ancestries by assessing their risk of cancer and offers prenatal
testing solutions for those who are pregnant or planning a family.
The Women’s Health business delivered revenue of $79.6 million in
the third quarter of 2023.
- Third quarter hereditary cancer testing volumes in Women's
Health grew 22% year-over-year, driven by competitive account wins
and increased adoption by providers of MyRisk for patients whose
family history puts them at a higher risk for cancer.
- Excluding contributions from the SneakPeek Early Gender DNA
Test, prenatal testing volumes in the third quarter of 2023 grew
20% year-over-year.
- In collaboration with Onsite Women’s Health, a leading national
provider of breast health services, we announced the launch of a
new breast cancer risk assessment program to help more women
understand their breast cancer risk. This program combines
diagnostic imaging and genetic risk assessment utilizing MyRisk
with RiskScore® and patient education. The program is expected to
enable affordable access to genetic testing and deliver
personalized insights to better inform clinical decisions for
millions of potential patients.
- MyRisk Hereditary Cancer Test with RiskScore now incorporates
breast density using Tyrer-Cuzick version 8 (TCv8) to provide
patients and providers with a more comprehensive look at their
five-year and remaining lifetime risk for breast cancer. MyRisk
with RiskScore is the first breast cancer risk model that includes
breast density, personal/family clinical history and a polygenic
risk score (PRS) based on genetically determined ancestry.
- As of October 2023, Myriad Genetics
sold over 1 million SneakPeek Early Gender DNA Tests.
Pharmacogenomics
The Myriad Genetics Pharmacogenomics business consists of the
GeneSight test that covers 64 medications commonly prescribed for
depression, anxiety, attention deficit hyperactivity disorder, and
other psychiatric conditions. GeneSight helps physicians understand
how genetic alterations impact patient response to antidepressants
and other drugs. In the pharmacogenomics category, the GeneSight
test recorded revenue of $35.7 million in the third quarter of
2023.
- In the third quarter, Myriad Genetics added approximately 4,000
clinicians who ordered GeneSight for the first time.
- Enhanced GeneSight report will now include information on how a
patient's smoking status may impact their body's metabolism of
certain medications.
- Presented positive preliminary results from Phase 1 of a
multi-phase study designed to better understand GeneSight's ability
to improve clinical outcomes and reduce healthcare costs. Based on
data from over 20,000 patients in the Optum Labs Data Warehouse, in
the first 180 days post GeneSight testing, total hospitalizations
decreased by more than 25% and psychiatric hospitalizations
decreased by more than 35%. Additional data and detail from this
study is expected to be published in 2024.
- Building on a 2020 meta-analysis of the clinical utility of the
GeneSight test, which included four prospective, controlled studies
and 1,556 unique patients, Myriad Genetics has incorporated
additional published studies to further measure the utility of
combinatorial pharmacogenomics testing for the treatment of major
depressive disorder (MDD). This updated meta-analysis continues to
show that access to GeneSight improved MDD response and remission
rates.
Liquidity and Cash FlowIn October 2023, Myriad
Genetics exercised its option to increase the size of its
asset-based credit facility (the “ABL Facility”) by $25 million to
$115 million.
|
|
|
(in millions) |
|
|
Total cash and cash equivalents at end of third quarter of
2023* |
|
$ |
86.3 |
|
Amount available to draw currently under the
asset-based credit facility** |
|
|
28.2 |
|
Estimated capital expenditures, capitalization of internal-use
software costs and cash flow from operations in the fourth quarter
of 2023 |
|
|
(7.0 |
) |
Estimated total available cash and cash equivalents and
availability under credit facility at year end 2023 |
|
$ |
107.5 |
|
|
|
|
* Cash and cash
equivalents at the end of the third quarter of 2023 reflects the
initial cash payment for the securities class action settlement
($20 million.) ** The Company increased the size of the ABL
Facility by $25 million to $115 million in October 2023. |
|
Footnotes:1 - Change of estimates may include both positive and
negative adjustments primarily driven by changes in the estimated
transaction price due to contractual adjustments, actual cash
collections, and obtaining updated information from payors and
patients that was unknown at the time revenue was recognized2 -
Tward JD, et al. Predicting Absolute Benefit in Risk of Metastasis
of Androgen Deprivation Therapy added to Radiation Therapy in
Patients with Newly Diagnosed Prostate Cancer. JCO 41, no. 16_suppl
(June 01, 2023)5030
Financial GuidanceMyriad Genetics updates its
2023 revenue and non-GAAP financial guidance, as stated in the
table below.*
(in millions, except per share amounts) |
FY 2023 |
|
FY 2023 Comments |
|
|
|
|
Revenue |
$747 - $753 |
|
Raised the 2023 revenue
guidance range. Revenue growth range now 10% - 11% over 2022. |
Gross margin % |
69% - 70% |
|
Raised mid-point of GM range
to be approximately 69.5% |
GAAP OPEX |
$774 - $779 |
|
Increase in GAAP operating
expenses include expected costs of approximately $34 million
associated with the settlement of the Ravgen litigation and an
additional $5 million in non-cash amortization associated with
acquisitions. |
Adjusted OPEX |
$548 - $553 |
|
Narrowing full year range with
one quarter remaining in the year. Mid-point of range moves
modestly higher from prior guidance. |
GAAP EPS |
$(3.15) - $(3.07) |
|
Decrease in GAAP EPS includes
expected costs of approximately $34 million associated with the
settlement of the Ravgen litigation and an additional $5 million in
non-cash amortization associated with acquisitions. |
Adjusted EPS |
$(0.33) - $(0.28) |
|
Narrowing full year range with
one quarter remaining in the year. Reiterate reaching positive
adjusted profitability and adjusted operating cash flow in the
fourth quarter 2023. |
*Assumes currency rates as of November 6, 2023 |
|
Myriad Genetics' fiscal year 2023 non-GAAP guidance begins with
the comparable GAAP financial measure and excludes the estimated
impact of stock-based compensation expense of approximately
$40.0 million, non-cash amortization associated with
acquisitions of approximately $48.0 million and special items
such as costs related to transformation initiatives of
approximately $24.0 million, legal settlement costs of
approximately $114.0 million, and tax adjustments of approximately
$8.0 million.
In addition, Myriad Genetics introduces its 2024 revenue
guidance of between $815 million and $835 million, or 9% - 11%
growth over the mid-point of the 2023 revenue guidance range.
Myriad Genetics also reiterates its long-term financial targets
presented at its investor event on September 19, 2023, which
includes targeted annual revenue growth of 10%+, gross margins of
70%+, annual growth in selling, general and administrative spend of
5%-6% and positive adjusted operating income and adjusted cash flow
in 2024 through 2026. Furthermore, Myriad Genetics expects a
significant reduction in capital expenditures and costs associated
with transformation initiatives in 2024 compared to 2023.
These projections are forward-looking statements and are subject
to the risks summarized in the safe harbor statement at the end of
this press release.
Conference Call and WebcastA conference call
will be held today, Monday, November 6, 2023, at 4:30 p.m. ET to
discuss Myriad Genetics’ financial results and business
developments for the third quarter 2023. The dial-in number for
domestic callers is 1-800-771-6781. International callers may dial
1-212-231-2900. All callers will be asked to reference reservation
number 22028316. An archived replay of the call will be available
for seven days by dialing 1-800-633-8284 and entering the
reservation number above. The conference call and slide
presentation will be available through a live webcast at
www.myriad.com.
About Myriad GeneticsMyriad Genetics is a
leading genetic testing and precision medicine company dedicated to
advancing health and well-being for all. Myriad Genetics provides
insights that help people take control of their health and enable
healthcare providers to better detect, treat, and prevent disease.
Myriad Genetics develops and offers genetic tests that help assess
the risk of developing disease or disease progression and guide
treatment decisions across medical specialties where critical
genetic insights can significantly improve patient care and lower
healthcare costs. For more information, visit www.myriad.com.
Myriad, the Myriad logo, BRACAnalysis, BRACAnalysis CDx,
Colaris, ColarisAP, MyRisk, Myriad myRisk, MyRisk Hereditary
Cancer, myChoice, Tumor BRACAnalysis CDx, MyChoice CDx, Prequel,
Prequel with Amplify, Amplify, Foresight, Precise, FirstGene,
SneakPeek, SneakPeek Early Gender DNA Test, Health.Illuminated.,
RiskScore, Prolaris, GeneSight, and EndoPredict are registered
trademarks or trademarks of Myriad Genetics, Inc. All third-party
marks—® and ™—are the property of their respective owners. © 2023
Myriad Genetics, Inc. All rights reserved.
Revenue by Product (Unaudited):
|
Three months ended September 30, |
(in millions) |
2023 |
|
2022 |
|
|
|
WH |
ONC |
PGx |
Other |
Total |
|
WH |
ONC |
PGx |
Other |
Total |
|
% Change |
Hereditary Cancer |
$ |
40.1 |
|
$ |
46.4 |
|
$ |
— |
|
$ |
— |
|
$ |
86.5 |
|
|
$ |
32.2 |
|
$ |
38.3 |
|
$ |
— |
|
$ |
— |
|
$ |
70.5 |
|
|
23 |
% |
Tumor Profiling |
|
— |
|
|
30.2 |
|
|
— |
|
|
— |
|
|
30.2 |
|
|
|
— |
|
|
30.8 |
|
|
— |
|
|
— |
|
|
30.8 |
|
|
(2 |
)% |
Prenatal |
|
39.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
39.5 |
|
|
|
22.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
22.1 |
|
|
79 |
% |
Pharmacogenomics |
|
— |
|
|
— |
|
|
35.7 |
|
|
— |
|
|
35.7 |
|
|
|
— |
|
|
— |
|
|
33.0 |
|
|
— |
|
|
33.0 |
|
|
8 |
% |
Total Revenue |
$ |
79.6 |
|
$ |
76.6 |
|
$ |
35.7 |
|
$ |
— |
|
$ |
191.9 |
|
|
$ |
54.3 |
|
$ |
69.1 |
|
$ |
33.0 |
|
$ |
— |
|
$ |
156.4 |
|
|
23 |
% |
|
Nine months ended September 30, |
(in millions) |
2023 |
|
2022 |
|
|
|
WH |
ONC |
PGx |
Other |
Total |
|
WH |
ONC |
PGx |
Other |
Total |
|
% Change |
Hereditary Cancer |
$ |
107.5 |
|
$ |
131.4 |
|
$ |
— |
|
$ |
— |
|
$ |
238.9 |
|
|
$ |
102.4 |
|
$ |
118.2 |
|
$ |
— |
|
$ |
— |
|
$ |
220.6 |
|
|
8 |
% |
Tumor Profiling |
|
— |
|
|
103.5 |
|
|
— |
|
|
— |
|
|
103.5 |
|
|
|
— |
|
|
96.9 |
|
|
— |
|
|
— |
|
|
96.9 |
|
|
7 |
% |
Prenatal |
|
111.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
111.3 |
|
|
|
87.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
87.3 |
|
|
27 |
% |
Pharmacogenomics |
|
— |
|
|
— |
|
|
102.9 |
|
|
— |
|
|
102.9 |
|
|
|
— |
|
|
— |
|
|
95.5 |
|
|
— |
|
|
95.5 |
|
|
8 |
% |
Other |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
|
0.3 |
|
|
(100)% |
Total Revenue |
$ |
218.8 |
|
$ |
234.9 |
|
$ |
102.9 |
|
$ |
— |
|
$ |
556.6 |
|
|
$ |
189.7 |
|
$ |
215.1 |
|
$ |
95.5 |
|
$ |
0.3 |
|
$ |
500.6 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Units:WH = Women’s HealthONC = OncologyPGx =
Pharmacogenomics
Product Categories:Hereditary Cancer – MyRisk, BRACAnalysis,
BRACAnalysis CDxTumor Profiling – myChoice CDx, Prolaris,
EndoPredictPrenatal – Foresight, Prequel, SneakPeekPharmacogenomics
– GeneSight
|
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations(in millions, except per share amounts) |
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(unaudited) |
Testing revenue |
$ |
191.9 |
|
|
$ |
156.4 |
|
|
$ |
556.6 |
|
|
$ |
500.6 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of testing revenue |
|
57.6 |
|
|
|
50.4 |
|
|
|
174.6 |
|
|
|
148.1 |
|
Research and development expense |
|
24.0 |
|
|
|
20.5 |
|
|
|
67.7 |
|
|
|
62.0 |
|
Selling, general, and administrative expense |
|
136.1 |
|
|
|
130.5 |
|
|
|
428.5 |
|
|
|
368.2 |
|
Legal charges pending settlement |
|
34.3 |
|
|
|
— |
|
|
|
111.8 |
|
|
|
— |
|
Goodwill and long-lived asset impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.7 |
|
Total costs and expenses |
|
252.0 |
|
|
|
201.4 |
|
|
|
782.6 |
|
|
|
589.0 |
|
Operating loss |
|
(60.1 |
) |
|
|
(45.0 |
) |
|
|
(226.0 |
) |
|
|
(88.4 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
|
0.6 |
|
|
|
1.1 |
|
|
|
1.8 |
|
|
|
1.6 |
|
Interest expense |
|
(1.0 |
) |
|
|
(0.8 |
) |
|
|
(2.0 |
) |
|
|
(2.3 |
) |
Other |
|
(0.7 |
) |
|
|
0.5 |
|
|
|
(3.7 |
) |
|
|
0.6 |
|
Total other expense, net |
|
(1.1 |
) |
|
|
0.8 |
|
|
|
(3.9 |
) |
|
|
(0.1 |
) |
Loss before income tax |
|
(61.2 |
) |
|
|
(44.2 |
) |
|
|
(229.9 |
) |
|
|
(88.5 |
) |
Income tax expense
(benefit) |
|
0.1 |
|
|
|
(9.1 |
) |
|
|
2.2 |
|
|
|
(18.8 |
) |
Net loss |
$ |
(61.3 |
) |
|
$ |
(35.1 |
) |
|
$ |
(232.1 |
) |
|
$ |
(69.7 |
) |
Net loss per share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.75 |
) |
|
$ |
(0.43 |
) |
|
$ |
(2.84 |
) |
|
$ |
(0.87 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
81.9 |
|
|
|
80.7 |
|
|
|
81.6 |
|
|
|
80.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Balance Sheets(in
millions, except share information) |
|
|
|
|
|
September 30, 2023 |
|
December 31,2022 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
76.0 |
|
|
$ |
56.9 |
|
Marketable investment securities |
|
10.3 |
|
|
|
58.0 |
|
Trade accounts receivable |
|
115.2 |
|
|
|
101.6 |
|
Inventory |
|
25.1 |
|
|
|
20.1 |
|
Prepaid taxes |
|
17.5 |
|
|
|
17.6 |
|
Prepaid expenses and other current assets |
|
21.3 |
|
|
|
20.4 |
|
Total current assets |
|
265.4 |
|
|
|
274.6 |
|
Operating lease right-of-use
assets |
|
104.0 |
|
|
|
103.9 |
|
Long-term marketable
investment securities |
|
— |
|
|
|
54.8 |
|
Property, plant and equipment,
net |
|
120.7 |
|
|
|
83.4 |
|
Intangibles, net |
|
356.6 |
|
|
|
379.7 |
|
Goodwill |
|
286.6 |
|
|
|
286.8 |
|
Other assets |
|
15.8 |
|
|
|
15.5 |
|
Total assets |
$ |
1,149.1 |
|
|
$ |
1,198.7 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
|
33.9 |
|
|
|
28.8 |
|
Accrued liabilities |
|
157.6 |
|
|
|
94.3 |
|
Current maturities of operating lease liabilities |
|
17.8 |
|
|
|
14.1 |
|
Total current liabilities |
|
209.3 |
|
|
|
137.2 |
|
Unrecognized tax benefits |
|
29.6 |
|
|
|
26.8 |
|
Long-term deferred taxes |
|
2.7 |
|
|
|
3.5 |
|
Long-term debt |
|
38.5 |
|
|
|
— |
|
Noncurrent operating lease
liabilities |
|
145.1 |
|
|
|
130.9 |
|
Other long-term
liabilities |
|
40.5 |
|
|
|
14.5 |
|
Total liabilities |
|
465.7 |
|
|
|
312.9 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, 82.1 million and
81.2 million shares outstanding at September 30, 2023 and
December 31, 2022, respectively |
|
0.8 |
|
|
|
0.8 |
|
Additional paid-in capital |
|
1,286.2 |
|
|
|
1,260.1 |
|
Accumulated other comprehensive loss |
|
(5.3 |
) |
|
|
(8.9 |
) |
Accumulated deficit |
|
(598.3 |
) |
|
|
(366.2 |
) |
Total stockholders' equity |
|
683.4 |
|
|
|
885.8 |
|
Total liabilities and stockholders’ equity |
$ |
1,149.1 |
|
|
$ |
1,198.7 |
|
|
|
|
|
|
|
|
|
|
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Statements of Cash
Flows(in millions) |
|
|
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
(unaudited) |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net loss |
$ |
(232.1 |
) |
|
$ |
(69.7 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
46.8 |
|
|
|
39.0 |
|
Non-cash lease expense |
|
8.6 |
|
|
|
8.6 |
|
Stock-based compensation expense |
|
30.3 |
|
|
|
29.9 |
|
Deferred income taxes |
|
(1.7 |
) |
|
|
(22.0 |
) |
Unrecognized tax benefits |
|
2.8 |
|
|
|
0.1 |
|
Net realized losses on marketable investment securities |
|
1.5 |
|
|
|
— |
|
Impairment of goodwill and long-lived assets |
|
— |
|
|
|
10.7 |
|
Other non-cash adjustments |
|
3.0 |
|
|
|
2.4 |
|
Changes in assets and liabilities: |
|
|
|
Prepaid expenses and other current assets |
|
(1.8 |
) |
|
|
0.4 |
|
Trade accounts receivable |
|
(13.7 |
) |
|
|
(12.8 |
) |
Inventory |
|
(5.0 |
) |
|
|
(4.4 |
) |
Prepaid taxes |
|
0.2 |
|
|
|
0.5 |
|
Other assets |
|
(0.2 |
) |
|
|
(0.9 |
) |
Tenant improvement allowance received |
|
16.3 |
|
|
|
8.6 |
|
Accounts payable |
|
2.2 |
|
|
|
(1.1 |
) |
Accrued expenses and other liabilities |
|
86.4 |
|
|
|
(83.4 |
) |
Deferred revenue |
|
0.2 |
|
|
|
(4.9 |
) |
Net cash used in operating
activities |
|
(56.2 |
) |
|
|
(99.0 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Capital expenditures |
|
(53.2 |
) |
|
|
(30.7 |
) |
Capitalization of internal-use
software costs |
|
(6.6 |
) |
|
|
— |
|
Purchases of marketable
investment securities |
|
— |
|
|
|
(98.8 |
) |
Proceeds from maturities and
sales of marketable investment securities |
|
103.7 |
|
|
|
87.6 |
|
Net cash provided by (used in)
investing activities |
|
43.9 |
|
|
|
(41.9 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Proceeds from common stock
issued under stock-based compensation plans |
|
— |
|
|
|
3.9 |
|
Payment of tax witheld for
common stock issued under stock-based compensation plans |
|
(7.3 |
) |
|
|
(9.1 |
) |
Proceeds from revolving credit
facility |
|
40.0 |
|
|
|
— |
|
Fees associated with issuance
of revolving credit facility |
|
(1.6 |
) |
|
|
— |
|
Fees associated with
refinancing of revolving credit facility |
|
— |
|
|
|
(0.7 |
) |
Payment on finance leases |
|
(0.1 |
) |
|
|
— |
|
Net cash provided by (used in)
financing activities |
|
31.0 |
|
|
|
(5.9 |
) |
Effect of foreign exchange
rates on cash, cash equivalents, and restricted cash |
|
(0.1 |
) |
|
|
(1.3 |
) |
Net increase (decrease) in
cash, cash equivalents, and restricted cash |
|
18.6 |
|
|
|
(148.1 |
) |
Cash, cash equivalents, and
restricted cash at beginning of the period |
|
66.4 |
|
|
|
258.8 |
|
Cash, cash equivalents, and
restricted cash at end of the period |
$ |
85.0 |
|
|
$ |
110.7 |
|
|
|
|
|
|
|
|
|
Safe Harbor StatementThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including the
company's updated fiscal year 2023 financial guidance, 2024 revenue
guidance and long-term financial targets through 2026, the
company's goal of adjusted profitability by the fourth quarter of
2023 and sustainable 10%+ annual revenue growth, and that the new
breast cancer risk assessment program with Onsite Women's Health is
expected to enable affordable access to genetic testing and deliver
personalized insights to better inform clinical decisions for
millions of potential patients These “forward-looking statements”
are management’s present expectations of future events as of the
date hereof and are subject to a number of known and unknown risks
and uncertainties that could cause actual results, conditions, and
events to differ materially and adversely from those anticipated.
These risks include, but are not limited to: the risk that sales
and profit margins of the company’s existing tests may decline or
that the company may not be able to operate its business on a
profitable basis; risks related to the company’s ability to achieve
certain revenue growth targets and generate sufficient revenue from
its existing product portfolio or in launching and commercializing
new tests to be profitable; risks related to changes in
governmental or private insurers’ coverage and reimbursement levels
for the company’s tests or the company’s ability to obtain
reimbursement for its new tests at comparable levels to its
existing tests; risks related to increased competition and the
development of new competing tests; the risk that the company may
be unable to develop or achieve commercial success for additional
tests in a timely manner, or at all; the risk that the company may
not successfully develop new markets or channels for its tests,
including the company’s ability to successfully generate
substantial revenue outside the United States; the risk that
licenses to the technology underlying the company’s tests and any
future tests are terminated or cannot be maintained on satisfactory
terms; risks related to delays or other problems with constructing
and operating the company’s laboratory testing facilities; risks
related to public concern over genetic testing in general or the
company’s tests in particular; risks related to regulatory
requirements or enforcement in the United States and foreign
countries and changes in the structure of the healthcare system or
healthcare payment systems; risks related to the company’s ability
to obtain new corporate collaborations or licenses and acquire or
develop new technologies or businesses on satisfactory terms, if at
all; risks related to the company’s ability to successfully
integrate and derive benefits from any technologies or businesses
that it licenses, acquires or develops; the risk that the company
is not able to secure additional financing to fund its business, if
needed, in a timely manner or on favorable terms, if it all; risks
related to the company’s projections or estimates about the
potential market opportunity for the company’s current and future
products; the risk that the company or its licensors may be unable
to protect or that third parties will infringe the proprietary
technologies underlying the company’s tests; the risk of
patent-infringement claims or challenges to the validity of the
company’s patents; risks related to changes in intellectual
property laws covering the company’s tests, or patents or
enforcement, in the United States and foreign countries; risks
related to security breaches, loss of data and other disruptions,
including from cyberattacks; risks of new, changing and competitive
technologies in the United States and internationally and that the
company may not be able to keep pace with the rapid technology
changes in its industry, or properly leverage new technologies to
achieve or sustain competitive advantages in its products; the risk
that the company may be unable to comply with financial operating
covenants under the company’s credit or lending agreements; risks
related to the company’s inability to achieve and maintain
effective disclosure controls and procedures and internal control
over financial reporting; risks related to current and future
investigations, claims or lawsuits, including derivative claims,
product or professional liability claims, including the risk that
the court does not approve the settlement of the class action
lawsuit, and risks related to the amount of the company's insurance
coverage limits and scope of insurance coverage with respect
thereto; and other factors discussed under the heading “Risk
Factors” contained in Item 1A of the company’s Annual Report on
Form 10-K filed with the U.S. Securities and Exchange Commission
(SEC) on March 1, 2023 as updated in the company's Quarterly Report
on Form 10-Q filed with the SEC on May 4, 2023 and the company's
Quarterly Report on Form 10-Q filed with the SEC on August 4, 2023,
as well as any further updates to those risk factors filed from
time to time in the company’s Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K. Myriad Genetics is not under any
obligation, and it expressly disclaims any obligation, to update or
alter any forward-looking statements, whether as a result of new
information, future events or otherwise except as required by
law.
Statement regarding use of non-GAAP
financial measuresIn this press release, the company’s
financial results and financial guidance are provided in accordance
with accounting principles generally accepted in the United States
(GAAP) and using certain non-GAAP financial measures. Management
believes that presentation of operating results using non-GAAP
financial measures provides useful supplemental information to
investors and facilitates the analysis of the company’s core
operating results and comparison of operating results across
reporting periods. Management also uses non-GAAP financial measures
to establish budgets and to manage the company’s business. A
reconciliation of the GAAP financial results to non-GAAP financial
results is included in the schedules below and a description of the
adjustments made to the GAAP financial measures is included at the
end of the schedules.
The company encourages investors to carefully consider its
results under GAAP, as well as its supplemental non-GAAP
information and the reconciliation between these presentations, to
more fully understand its business. Non-GAAP financial results are
reported in addition to, and not as a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
|
Reconciliation of GAAP to Non-GAAP Financial
Measuresfor the Three and Nine Months ended
September 30, 2023 and 2022(unaudited data in millions,
except per share amounts) |
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Adjusted Gross
Margin |
|
|
|
|
|
|
|
GAAP Gross Profit(1) |
$ |
134.3 |
|
|
$ |
106.0 |
|
|
$ |
382.0 |
|
|
$ |
352.5 |
|
Acquisition - amortization of intangible assets |
|
0.4 |
|
|
|
— |
|
|
|
1.0 |
|
|
|
— |
|
Equity compensation |
|
0.4 |
|
|
|
0.4 |
|
|
|
1.1 |
|
|
|
1.0 |
|
Transformation initiatives |
|
— |
|
|
|
— |
|
|
|
0.2 |
|
|
|
— |
|
Adjusted Gross Profit |
$ |
135.1 |
|
|
$ |
106.4 |
|
|
$ |
384.3 |
|
|
$ |
353.5 |
|
Adjusted Gross Margin |
|
70.4 |
% |
|
|
68.0 |
% |
|
|
69.0 |
% |
|
|
70.6 |
% |
(1) Consists of
total revenues less cost of testing from the Condensed Consolidated
Statements of Operations. |
|
|
|
|
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Adjusted Operating
Expenses |
|
|
|
|
|
|
|
GAAP Operating
Expenses(1) |
$ |
194.4 |
|
|
$ |
151.0 |
|
|
$ |
608.0 |
|
|
$ |
440.9 |
|
Acquisition - amortization of intangible assets |
|
(10.3 |
) |
|
|
(10.1 |
) |
|
|
(31.0 |
) |
|
|
(30.4 |
) |
Goodwill and long-lived asset impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10.7 |
) |
Equity compensation |
|
(11.3 |
) |
|
|
(9.0 |
) |
|
|
(29.2 |
) |
|
|
(28.7 |
) |
Transformation initiatives |
|
(2.8 |
) |
|
|
(4.7 |
) |
|
|
(20.6 |
) |
|
|
(12.4 |
) |
Legal charges, net of insurance reimbursement |
|
(35.1 |
) |
|
|
— |
|
|
|
(113.3 |
) |
|
|
12.9 |
|
Other adjustments |
|
2.4 |
|
|
|
(0.2 |
) |
|
|
1.6 |
|
|
|
0.7 |
|
Adjusted Operating
Expenses |
$ |
137.3 |
|
|
$ |
127.0 |
|
|
$ |
415.5 |
|
|
$ |
372.3 |
|
(1) Consists of
research and development expense, selling, general, and
administrative expense, and goodwill and long-lived asset
impairment charges from the Condensed Consolidated Statements of
Operations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Adjusted Operating
Income (Loss) |
|
|
|
|
|
|
|
GAAP Operating Loss |
$ |
(60.1 |
) |
|
$ |
(45.0 |
) |
|
$ |
(226.0 |
) |
|
$ |
(88.4 |
) |
Acquisition - amortization of intangible assets |
|
10.7 |
|
|
|
10.1 |
|
|
|
32.0 |
|
|
|
30.4 |
|
Goodwill and long-lived asset impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.7 |
|
Equity compensation |
|
11.7 |
|
|
|
9.4 |
|
|
|
30.3 |
|
|
|
29.6 |
|
Transformation initiatives |
|
2.8 |
|
|
|
4.7 |
|
|
|
20.8 |
|
|
|
12.4 |
|
Legal charges, net of insurance reimbursement |
|
35.1 |
|
|
|
— |
|
|
|
113.3 |
|
|
|
(12.9 |
) |
Other adjustments |
|
(2.4 |
) |
|
|
0.2 |
|
|
|
(1.6 |
) |
|
|
(0.7 |
) |
Adjusted Operating Loss |
$ |
(2.2 |
) |
|
$ |
(20.6 |
) |
|
$ |
(31.2 |
) |
|
$ |
(18.9 |
) |
|
|
|
|
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Adjusted Net Income
(Loss)(1) |
|
|
|
|
|
|
|
GAAP Net Loss |
$ |
(61.3 |
) |
|
$ |
(35.1 |
) |
|
$ |
(232.1 |
) |
|
$ |
(69.7 |
) |
Acquisition - amortization of intangible assets |
|
10.7 |
|
|
|
10.1 |
|
|
|
32.0 |
|
|
|
30.4 |
|
Goodwill and long-lived asset impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.7 |
|
Equity compensation |
|
11.7 |
|
|
|
9.4 |
|
|
|
30.3 |
|
|
|
29.6 |
|
Transformation initiatives |
|
2.8 |
|
|
|
4.7 |
|
|
|
20.8 |
|
|
|
12.4 |
|
Legal charges, net of insurance reimbursement |
|
35.1 |
|
|
|
— |
|
|
|
113.3 |
|
|
|
(12.9 |
) |
Other adjustments |
|
(1.7 |
) |
|
|
0.2 |
|
|
|
— |
|
|
|
(0.7 |
) |
Tax adjustments |
|
0.4 |
|
|
|
(4.5 |
) |
|
|
9.6 |
|
|
|
(14.3 |
) |
Adjusted Net Loss |
$ |
(2.3 |
) |
|
$ |
(15.2 |
) |
|
$ |
(26.1 |
) |
|
$ |
(14.5 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
81.9 |
|
|
|
80.7 |
|
|
|
81.6 |
|
|
|
80.4 |
|
Diluted |
|
81.9 |
|
|
|
80.7 |
|
|
|
81.6 |
|
|
|
80.4 |
|
Adjusted Earnings Per
Share |
|
|
|
|
|
|
|
Basic |
$ |
(0.03 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.18 |
) |
Diluted |
$ |
(0.03 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.18 |
) |
(1) To determine
Adjusted Earnings Per Share, or adjusted EPS. |
|
|
Adjusted
Free Cash Flow Reconciliationfor the Three and
Nine Months Ended September 30, 2023 and 2022(unaudited
data in millions) |
|
|
|
|
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Cash flow from operations |
$ |
(26.6 |
) |
|
$ |
(1.8 |
) |
|
$ |
(56.2 |
) |
|
$ |
(99.0 |
) |
Transformation initiatives |
|
2.8 |
|
|
|
4.7 |
|
|
|
15.1 |
|
|
|
12.4 |
|
Legal charges, net of insurance reimbursement |
|
21.1 |
|
|
|
— |
|
|
|
23.3 |
|
|
|
49.9 |
|
Other adjustments |
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
Adjusted operating cash
flow |
$ |
(2.7 |
) |
|
$ |
2.9 |
|
|
$ |
(17.4 |
) |
|
$ |
(36.7 |
) |
Capital expenditures |
|
(10.9 |
) |
|
|
(17.7 |
) |
|
|
(53.2 |
) |
|
|
(30.7 |
) |
Capitalization of internal-use software costs |
|
(2.1 |
) |
|
|
— |
|
|
|
(6.6 |
) |
|
|
— |
|
Adjusted free cash flow |
$ |
(15.7 |
) |
|
$ |
(14.8 |
) |
|
$ |
(77.2 |
) |
|
$ |
(67.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Following is a description of the adjustments made to GAAP
financial measures:
- Acquisition – amortization of intangible assets – represents
recurring amortization charges resulting from the acquisition of
intangible assets.
- Goodwill and long-lived asset impairment charges – impairment
charges on long-lived assets and goodwill.
- Equity compensation – non-cash equity-based compensation
provided to Myriad Genetics employees and directors.
- Transformation initiatives – transitory costs such as
consulting and professional fees related to transformation
initiatives, additional rent as a result of the build-out of the
company's new laboratories in Salt Lake City, Utah and in South San
Francisco, California, while maintaining its current laboratories
in those locations, re-location costs of equipment to new
laboratories, severance costs, and accelerated depreciation in
connection with the company's decision to cease the use of its
former corporate headquarters in Salt Lake City, Utah. With respect
to the adjusted free cash flow reconciliation, the cash flow effect
of transformation initiatives excludes non-cash items such as
accelerated depreciation.
- Legal charges, net of insurance reimbursement – one-time legal
expenses, net of insurance reimbursement. For the three months
ended September 30, 2023, legal charges, net of insurance
reimbursement primarily relates to a $34.0 million settlement of
the Ravgen litigation, of which $21.25 million of payment is
contingent upon certain future events. For the nine months ended
September 30, 2023, legal charges, net of insurance reimbursement
primarily includes the amounts related to the settlement of the
Ravgen litigation and a $77.5 million settlement of the securities
class action lawsuit. For the nine months ended September 30, 2022,
legal charges, net of insurance reimbursement includes the gain
from reimbursement of prior legal expenses and settlements. With
respect to the adjusted free cash flow reconciliation, the cash
flow effect includes cash paid for settlements in the related
period.
- Other adjustments – other one-time non-recurring expenses
including consulting and professional fees related to prior year
acquisitions, changes in the fair value of contingent consideration
related to acquisitions from prior years and reclassifications of
cumulative translation adjustments to income upon liquidation of an
investment in a foreign entity.
- Tax adjustments – tax expense/(benefit) due to non-GAAP
adjustments, differences between stock compensation recorded for
book purposes as compared to the allowable tax deductions, and
valuation allowance recognized against federal and state deferred
tax assets in the United States. A valuation allowance of $37.2
million was not recognized for non-GAAP purposes given the
company's historical and forecasted positive earnings
performance.
Media Contact: |
|
Megan Manzari |
|
Investor Contact: |
|
Matt Scalo |
|
|
(385) 318-3718 |
|
|
|
(801) 584-3532 |
|
|
megan.manzari@myriad.com |
|
|
|
matt.scalo@myriad.com |
|
|
|
|
|
|
|
Myriad Genetics (NASDAQ:MYGN)
Historical Stock Chart
From Apr 2024 to May 2024
Myriad Genetics (NASDAQ:MYGN)
Historical Stock Chart
From May 2023 to May 2024