Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing
and precision medicine, today announced financial results for its
quarter ended March 31, 2021 and provided an update on recent
business performance.
Financial
Highlights:Myriad Genetics delivered total revenue in the
quarter of $173.1 million which grew 6% year-over-year and
increased 12% sequentially from the fiscal quarter ending December
31, 2020.
- Total test volumes of 236,000 declined 1% year-over-year but
increased 5% sequentially. Average U.S. revenue per test increased
2% sequentially, reflecting an increasingly stable pricing
environment. Average selling prices benefitted in the quarter from
Medicare back pay revenue for the Prolaris® test for prostate
cancer.
- GAAP gross margin was 70.9% and adjusted gross margin was
71.5%. Adjusted gross margin improved 140 basis points
sequentially, impacted positively by test pricing and negatively by
increased revenue mix from prenatal testing and lower margin
pharmaceutical and clinical service revenue.
- GAAP total operating expenses were $169.5 million. Total
adjusted operating expenses increased $1.3 million year-over-year
to $127.0 million.
- GAAP operating loss in the quarter was ($46.7) million;
adjusted operating loss of ($3.3) million.
- GAAP earnings per share (EPS) were ($0.52); adjusted EPS were
($0.06) which improved by $0.06 sequentially.
- Free cash flow in the quarter was $64.7 million and was
driven by a significant federal tax refund of approximately $90
million. The company ended the quarter with $188.0 million in
cash, cash equivalents and investments and $157.0 million
drawn on its revolving credit facility.
Business Performance and Highlights
Women’s HealthThe Myriad Women’s Health
business -- which serves women assessing their risk of cancer, and
those who are pregnant or planning a family -- recorded revenue of
$55.2 million in the quarter, a decline of 15% year-over-year.
Elective testing for hereditary cancer has been negatively impacted
by the COVID-19 pandemic due to delayed elective office visits. The
company’s prenatal business continued to demonstrate strong growth
trends with test volumes increasing 9% year-over-year and 7%
sequentially.
- Myriad myRisk® Hereditary Cancer
- myRisk® Hereditary Cancer test volumes for the Women’s Health
business in the U.S. declined 25% year-over-year largely due to the
impact of the pandemic.
- Myriad Foresight® Carrier Screen and Myriad Prequel® Prenatal
Screen
- Myriad’s proprietary AMPLIFY™ technology, which further
increases the performance of its Prequel™ noninvasive prenatal
screening (NIPS) test, is leading to increased new prenatal users
and test utilization. Since the launch of the AMPLIFY™ technology
in July, Myriad has seen an increase of 12% in the total number of
ordering providers for prenatal testing services, including Prequel
and Foresight, with 11% growth in total test utilization per
provider.
OncologyThe Myriad Oncology business provides
hereditary cancer testing for patients who have cancer, and
products such as the EndoPredict® breast cancer prognostic test,
the Prolaris prostate cancer test, and the myChoice CDx and
BRACAnalysis CDx companion diagnostic tests for predicting response
to PARP inhibitors. The Oncology business delivered total revenue
of $75.6 million, up 39% relative to revenue in the March quarter
of last year.
- Myriad myRisk® Hereditary Cancer
- myRisk® Hereditary Cancer test volumes for the Oncology
business in the U.S. declined 9% year-over-year.
- Myriad Prolaris® Prostate Cancer
- Presented new data at the American Society of Clinical Oncology
Genitourinary Conference demonstrating the Prolaris test can
accurately predict which patients will benefit from multi-modality
therapy. Using the newly established threshold, 27% of men with
newly diagnosed high-risk disease and 73% with unfavorable
intermediate-risk disease could avoid multimodality therapy.
- Myriad BRACAnalysis® CDx and myChoice® CDx
- Saw significant increases in BRACAnalysis CDx and myChoice CDx
test volume in Japan with total revenue from the country increasing
more than four-fold year-over-year to $11.9 million.
- Received new reimbursement for the myChoice® diagnostic system
in Japan effective January 1, 2021.
- New Tumor Profiling Product:
- Announced new partnership with
Intermountain Precision Genomics, powered by technology from
Illumina (NASDAQ: ILMN), for a comprehensive offering of germline
and somatic tumor testing services. The strategic collaboration
combines germline genetic testing, next-generation tumor sequencing
and world-class testing capabilities to elevate global precision
oncology care.
Mental HealthMyriad’s Mental Health business --
which consists of the GeneSight® psychotropic test that helps
physicians understand how genetic alterations impact response to
antidepressant and other psychotropic medications -- saw revenue of
$17.6 million in the quarter compared to $20.4 million in the same
period last year. Test volume for GeneSight was up 17%
sequentially.
- Myriad GeneSight
- Saw a strong increase in new ordering providers with over 2,600
physicians ordering GeneSight for the first time in the quarter, up
24% sequentially. Overall, the number of ordering physicians
increased 10% sequentially and test utilization per provider
increased 4% sequentially despite the strong growth in new ordering
providers.
- Published a new study in Psychiatry
Research demonstrating that the combinatorial approach available in
the GeneSight® Psychotropic test is better than single-gene testing
at predicting patient outcomes and medication blood levels.
AutoimmuneMyriad’s Autoimmune business -- which
consists of the Vectra test for measuring disease activity in
rheumatoid arthritis -- generated revenue of $10.7 million in the
quarter compared to $10.5 million in the same period last year.
- Vectra®
- Signed a definitive agreement to sell select operating assets
and intellectual property (IP), including the Vectra® test, from
Myriad Autoimmune’s business unit to Laboratory Corporation of
America Holdings (NYSE: LH) for $150.0 million in cash. The deal is
expected to close by the end of the third quarter of calendar year
2021.
OtherOther revenue – comprised of Myriad RBM
contract research services for the pharmaceutical industry and the
myPath Melanoma diagnostic test in dermatology -- was $14.0 million
in the March quarter versus $14.0 million in the same period in the
prior year.
- Signed a definitive agreement to sell the Myriad myPath®, LLC,
Laboratory, which is the laboratory that offers the myPath Melanoma
test, to Castle Biosciences, Inc. for $32.5 million in cash.
The transaction is expected to close in the second quarter of
calendar year 2021.
- The company generated $2.5 million in the quarter from COVID-19
testing services. Given the declining demand for testing in the
United States, Myriad does not expect to have significant COVID-19
testing revenue going forward.
Investor DayMyriad will host an Investor Day
tomorrow, May 4, 2021 at 11:00 am EDT, to provide an update on its
transformation plan and growth initiatives. The Investor Day will
be a virtual event hosted on the company’s website. The link to the
Investor Day event and registration is under the investor relations
section of the website.
Financial GuidanceGiven the continued
unpredictability surrounding the COVID-19 pandemic and the impact
it has had on the healthcare environment, customer behavior and the
ability to market tests to physicians, the company will not provide
financial guidance for the quarter ending June 30, 2021 or fiscal
year 2021.
About Myriad GeneticsMyriad Genetics Inc., is a
leading genetic testing and precision medicine company dedicated to
improving and transforming patient lives worldwide. Myriad
discovers and commercializes molecular diagnostic tests that:
determine the risk of developing disease, accurately diagnose
disease, assess the risk of disease progression, and guide
treatment decisions across medical specialties where molecular
diagnostics can significantly improve patient care and lower
healthcare costs. For more information, please visit the company's
website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris
AP, myPath, myRisk, Myriad myRisk, myRisk Hereditary Cancer,
myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx,
myChoice CDx, Vectra, Prequel, Foresight, GeneSight, riskScore and
Prolaris are trademarks or registered trademarks of Myriad
Genetics, Inc. or its wholly owned subsidiaries in the United
States and foreign countries. MYGN-F, MYGN-G.
Revenue by Product (Unaudited):
|
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Three months ended March 31, |
|
2021 |
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|
2020 |
|
|
|
(in
millions) |
WH |
ONC |
MH |
AI |
Other |
Total |
|
WH |
ONC |
MH |
AI |
Other |
Total |
|
% Change |
Molecular diagnostic revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hereditary Cancer Testing |
$ |
31.5 |
|
|
$ |
44.6 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
76.1 |
|
|
$ |
44.3 |
|
|
$ |
40.9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
85.2 |
|
|
-10.7 |
% |
Prenatal |
23.7 |
|
|
— |
|
— |
|
— |
|
— |
|
|
23.7 |
|
|
20.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20.3 |
|
|
16.7 |
% |
GeneSight |
— |
|
|
— |
|
17.6 |
|
— |
|
— |
|
|
17.6 |
|
|
— |
|
|
— |
|
|
20.4 |
|
|
— |
|
|
— |
|
|
20.4 |
|
|
-13.7 |
% |
Vectra |
— |
|
|
— |
|
— |
|
10.7 |
|
— |
|
|
10.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
10.5 |
|
|
— |
|
|
10.5 |
|
|
1.9 |
% |
myChoice CDx |
— |
|
|
8.4 |
|
— |
|
— |
|
— |
|
|
8.4 |
|
|
— |
|
|
3.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
3.3 |
|
|
154.5 |
% |
Prolaris |
— |
|
|
18.5 |
|
— |
|
— |
|
— |
|
|
18.5 |
|
|
— |
|
|
6.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
6.8 |
|
|
172.1 |
% |
EndoPredict |
— |
|
|
4.1 |
|
— |
|
— |
|
— |
|
|
4.1 |
|
|
— |
|
|
3.5 |
|
|
— |
|
|
— |
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|
— |
|
|
3.5 |
|
|
17.1 |
% |
Other |
— |
|
|
— |
|
— |
|
— |
|
0.5 |
|
|
0.5 |
|
|
— |
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|
— |
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|
— |
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|
— |
|
|
0.5 |
|
|
0.5 |
|
|
0.0 |
% |
Total
molecular diagnostic revenue |
55.2 |
|
|
75.6 |
|
17.6 |
|
10.7 |
|
0.5 |
|
|
159.6 |
|
|
64.6 |
|
|
54.5 |
|
|
20.4 |
|
|
10.5 |
|
|
0.5 |
|
|
150.5 |
|
|
6.0 |
% |
Pharmaceutical and clinical service revenue |
— |
|
|
— |
|
— |
|
— |
|
13.5 |
|
|
13.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
13.5 |
|
|
13.5 |
|
|
0.0 |
% |
Total
revenue |
$ |
55.2 |
|
|
$ |
75.6 |
|
$ |
17.6 |
|
$ |
10.7 |
|
$ |
14.0 |
|
|
$ |
173.1 |
|
|
$ |
64.6 |
|
|
$ |
54.5 |
|
|
$ |
20.4 |
|
|
$ |
10.5 |
|
|
$ |
14.0 |
|
|
$ |
164.0 |
|
|
5.5 |
% |
|
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|
WH = Women’s HealthONC = OncologyMH = Mental Health AI =
Autoimmune
MYRIAD
GENETICS, INC. AND SUBSIDIARIES |
Condensed
Consolidated Statements of Operations (Unaudited) |
(In Millions, except
per share amounts) |
|
Three months
ended |
|
|
March
31, |
|
|
2021 |
|
|
2020 |
|
|
Molecular
diagnostic testing |
$ |
159.6 |
|
|
$ |
150.5 |
|
|
Pharma and
clinical services |
|
13.5 |
|
|
|
13.5 |
|
|
Total revenue |
|
173.1 |
|
|
|
164.0 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
Cost of molecular diagnostic testing |
|
44.1 |
|
|
|
43.1 |
|
|
Cost of pharmaceutical and clinical services |
|
6.2 |
|
|
|
7.0 |
|
|
Research and development expense |
|
23.1 |
|
|
|
19.7 |
|
|
Change in the fair value of contingent consideration |
0.9 |
|
|
|
(3.4 |
) |
|
Selling, general, and administrative expense |
|
145.5 |
|
|
|
132.9 |
|
|
Goodwill and intangible asset impairment charges |
- |
|
|
|
98.4 |
|
|
Total costs and expenses |
|
219.8 |
|
|
|
297.7 |
|
|
Operating loss |
|
(46.7 |
) |
|
|
(133.7 |
) |
|
Other income
(expense): |
|
|
|
|
|
|
Interest income |
|
0.2 |
|
|
|
0.8 |
|
|
Interest expense |
|
(3.0 |
) |
|
|
(2.3 |
) |
|
Other |
|
(0.1 |
) |
|
|
4.1 |
|
|
Total other income (expense), net |
|
(2.9 |
) |
|
|
2.6 |
|
|
Loss before income tax |
|
(49.6 |
) |
|
|
(131.1 |
) |
|
Income tax
benefit |
|
(10.1 |
) |
|
|
(15.9 |
) |
|
Net
loss |
$ |
(39.5 |
) |
|
$ |
(115.2 |
) |
|
Net loss attributable to non-controlling interest |
- |
|
|
|
- |
|
|
Net loss
attributable to Myriad Genetics, Inc. stockholders |
$ |
(39.5 |
) |
|
$ |
(115.2 |
) |
|
Loss per
share: |
|
|
|
|
|
|
Loss per share - basic |
$ |
(0.52 |
) |
|
$ |
(1.55 |
) |
|
Loss per share - diluted |
|
(0.52 |
) |
|
|
(1.55 |
) |
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
Basic |
|
76.0 |
|
|
|
74.5 |
|
|
Diluted |
|
76.0 |
|
|
|
74.5 |
|
|
MYRIAD
GENETICS, INC. AND SUBSIDIARIES |
|
Condensed
Consolidated Balance Sheets |
|
(in millions) |
|
|
|
March
31, |
December
31, |
|
|
|
2021 |
2020 |
|
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
148.9 |
|
|
$ |
117.0 |
|
|
Marketable investment securities |
|
27.2 |
|
|
|
33.7 |
|
|
Prepaid expenses |
|
14.0 |
|
|
|
11.7 |
|
|
Inventory |
|
24.6 |
|
|
|
27.1 |
|
|
Trade accounts receivable |
|
94.1 |
|
|
|
89.5 |
|
|
Prepaid taxes |
|
18.1 |
|
|
|
108.4 |
|
|
Other receivables |
|
2.3 |
|
|
|
2.0 |
|
|
Total current assets |
|
329.2 |
|
|
|
389.4 |
|
|
Property,
plant and equipment, net |
|
45.1 |
|
|
|
40.7 |
|
|
Operating
lease right-of-use assets |
|
58.9 |
|
|
|
59.7 |
|
|
Long-term
marketable investment securities |
|
11.9 |
|
|
|
21.0 |
|
|
Intangibles,
net |
|
559.9 |
|
|
|
576.5 |
|
|
Goodwill |
|
328.3 |
|
|
|
329.2 |
|
|
Other
assets |
|
3.6 |
|
|
|
2.3 |
|
|
Total assets |
$ |
1,336.9 |
|
|
$ |
1,418.8 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
20.8 |
|
|
$ |
20.5 |
|
|
Accrued liabilities |
|
83.1 |
|
|
|
79.1 |
|
|
Current maturities of operating lease liabilities |
14.0 |
|
|
|
13.6 |
|
|
Deferred revenue |
|
31.1 |
|
|
|
32.7 |
|
|
Total current liabilities |
|
149.0 |
|
|
|
145.9 |
|
|
Unrecognized
tax benefits |
|
30.8 |
|
|
|
30.5 |
|
|
Long-term
deferred taxes |
|
59.2 |
|
|
|
71.3 |
|
|
Long-term
debt |
|
154.0 |
|
|
|
224.8 |
|
|
Noncurrent
operating lease liabilities |
|
49.4 |
|
|
|
50.6 |
|
|
Other
long-term liabilities |
|
19.3 |
|
|
|
14.7 |
|
|
Total liabilities |
|
461.7 |
|
|
|
537.8 |
|
|
Commitments
and contingencies |
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Common stock, 76.7 and 75.4 shares outstanding at March 31, 2021
and December 31, 2020, respectively |
0.8 |
|
|
|
0.8 |
|
|
Additional paid-in capital |
|
1,144.5 |
|
|
|
1,109.5 |
|
|
Accumulated other comprehensive loss |
(3.6 |
) |
|
|
(2.3 |
) |
|
Accumulated deficit |
|
(266.5 |
) |
|
|
(227.0 |
) |
|
Total Myriad Genetics, Inc. stockholders' equity |
875.2 |
|
|
|
881.0 |
|
|
Non-controlling interest |
|
- |
|
|
|
- |
|
|
Total stockholders' equity |
|
875.2 |
|
|
|
881.0 |
|
|
Total liabilities and stockholders' equity |
$ |
1,336.9 |
|
|
$ |
1,418.8 |
|
|
MYRIAD
GENETICS, INC. AND SUBSIDIARIES |
|
Condensed
Consolidated Statements of Cash Flows (unaudited) |
|
(in millions) |
|
|
|
Three months
ended |
|
|
|
March
31, |
|
|
|
2021 |
|
2020 |
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss attributable to Myriad Genetics, Inc. stockholders |
|
$ |
|
(39.5 |
) |
|
$ |
(115.2 |
) |
|
Adjustments
to reconcile net loss to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
18.4 |
|
|
|
17.9 |
|
|
Non-cash interest expense |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
Gain on deconsolidation of subsidiary |
|
|
|
- |
|
|
|
(1.0 |
) |
|
Gain on disposition of assets |
|
|
|
(0.3 |
) |
|
|
(0.1 |
) |
|
Share-based compensation expense |
|
|
|
9.0 |
|
|
|
7.5 |
|
|
Non-cash lease expense |
|
|
|
3.5 |
|
|
|
- |
|
|
Deferred income taxes |
|
|
|
(11.8 |
) |
|
|
(16.0 |
) |
|
Unrecognized tax benefits |
|
|
|
0.3 |
|
|
|
(0.1 |
) |
|
Impairment of goodwill and intangible assets |
|
|
|
- |
|
|
|
98.4 |
|
|
Change in fair value of contingent consideration |
|
|
|
0.9 |
|
|
|
2.1 |
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
|
(2.1 |
) |
|
|
3.6 |
|
|
Trade accounts receivable |
|
|
|
(4.7 |
) |
|
|
15.9 |
|
|
Other receivables |
|
|
|
(0.3 |
) |
|
|
1.2 |
|
|
Inventory |
|
|
|
2.4 |
|
|
|
(2.6 |
) |
|
PrepaidtTaxes |
|
|
|
90.3 |
|
|
|
(0.7 |
) |
|
Other assets |
|
|
|
(1.2 |
) |
|
|
- |
|
|
Accounts payable |
|
|
|
0.3 |
|
|
|
9.2 |
|
|
Accrued liabilities |
|
|
|
7.7 |
|
|
|
(3.6 |
) |
|
Deferred revenue |
|
|
|
(1.6 |
) |
|
|
0.2 |
|
|
Net cash
provided by operating activities |
|
|
|
71.8 |
|
|
|
16.8 |
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital
expenditures |
|
|
|
(7.1 |
) |
|
|
(3.0 |
) |
|
Proceeds
from sale of subsidiary |
|
|
|
- |
|
|
|
21.3 |
|
|
Purchase of
marketable investment securities |
|
|
|
- |
|
|
|
(15.8 |
) |
|
Proceeds
from maturities and sales of marketable investment securities |
|
|
|
15.3 |
|
|
|
20.7 |
|
|
Net cash
provided by investing activities |
|
|
|
8.2 |
|
|
|
23.2 |
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds
from common stock issued under share-based compensation plans |
|
|
|
26.5 |
|
|
|
0.3 |
|
|
Payment of
tax withheld for common stock issued under share-based comp
plan |
|
|
|
(0.5 |
) |
|
|
(0.1 |
) |
|
Payment of
contingent consideration recognized at acquisition |
|
|
|
(3.3 |
) |
|
|
- |
|
|
Fees
associated with refinancing of revolving credit facility |
|
|
|
(1.2 |
) |
|
|
- |
|
|
Repayment of
revolving credit facility |
|
|
|
(70.0 |
) |
|
|
- |
|
|
Net cash
provided by (used in) financing activities |
|
|
|
(48.5 |
) |
|
|
0.2 |
|
|
Effect of
foreign exchange rates on cash and cash equivalents |
|
|
|
0.4 |
|
|
|
(1.9 |
) |
|
Change in
cash and cash equivalents classified as held for sale |
|
|
|
- |
|
|
|
1.5 |
|
|
Net increase
in cash and cash equivalents |
|
|
|
31.9 |
|
|
|
38.3 |
|
|
Cash and
cash equivalents at beginning of the period |
|
|
|
117.0 |
|
|
|
81.2 |
|
|
Cash and
cash equivalents at end of the period |
|
$ |
|
148.9 |
|
|
$ |
121.0 |
|
|
Safe Harbor StatementThis press release
contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements relating to an increasingly stable pricing environment,
AMPLIFYTM leading to new prenatal users and increased text
utilization; the exploration of strategic alternatives for the
Myriad RBM business; plans to host an Investor Day to provide an
update on the company’s strategic transaction plan on May 4, 2021;
and the Company’s strategic imperatives under the caption “About
Myriad Genetics.” These “forward-looking statements” are
management’s present expectations of future events and are subject
to a number of risks and uncertainties that could cause actual
results to differ materially and adversely from those described or
implied in the forward-looking statements. These risks include, but
are not limited to: uncertainties associated with COVID-19,
including its possible effects on the Company’s operations and the
demand for its products and services; risks related to the
Company’s ability to efficiently and flexibly manage its business
amid uncertainties associated with COVID-19; the risk that sales
and profit margins of the Company’s existing molecular diagnostic
tests and pharmaceutical and clinical services 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 generate
sufficient revenue from its existing product portfolio or in
launching and commercializing new tests; risks related to changes
in the 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 and services; the risk that the
Company may be unable to develop or achieve commercial success for
additional molecular diagnostic tests and pharmaceutical and
clinical services in a timely manner, or at all; the risk that the
Company may not successfully develop new markets for its molecular
diagnostic tests and pharmaceutical and clinical services,
including the Company’s ability to successfully generate revenue
outside the United States; the risk that licenses to the technology
underlying the Company’s molecular diagnostic tests and
pharmaceutical and clinical services tests and any future tests are
terminated or cannot be maintained on satisfactory terms; risks
related to delays or other problems with 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 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 or acquires; risks related to the
Company’s projections about the potential market opportunity for
the Company’s 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 molecular diagnostic tests and
pharmaceutical and clinical services, or patents or enforcement, in
the United States and foreign countries; risks of new, changing and
competitive technologies and regulations in the United States and
internationally; the risk that the Company may be unable to comply
with financial operating covenants under the Company’s credit or
lending agreements; the risk that the Company will be unable to
pay, when due, amounts due under the Company’s credit or lending
agreements; risks related to the material weakness identified in
the Company’s internal control over financial reporting, including
the impact thereof and the Company’s remediation plan; and other
factors discussed under the heading “Risk Factors” contained in
Item 1A of the Company’s Transition Report on Form 10-K filed with
the Securities and Exchange Commission on March 16, 2021, as
well as any 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.
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 attached 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
Measures |
|
|
for
the three month ended March 31, 2021 and 2020 |
|
|
|
(Unaudited
data in millions, except per share amount) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months endedMarch 31, 2021 |
|
Three months endedMarch 31, 2020 |
Adjusted Gross Margin |
|
|
|
GAAP Gross Profit (1) |
|
122.8 |
|
|
|
113.9 |
|
Equity compensation |
|
0.3 |
|
|
|
0.4 |
|
Other adjustments |
|
0.6 |
|
|
|
- |
|
Adjusted
Gross Profit |
$ |
123.7 |
|
|
$ |
114.3 |
|
Adjusted
Gross Margin |
|
71.5 |
% |
|
|
69.7 |
% |
(1) Consists of total revenues less cost of molecular diagnostic
testing and cost of pharmaceutical and clinical services from the
condensed consolidated statements of operations. |
|
|
|
|
|
|
|
|
|
Three months endedMarch 31, 2021 |
|
Three months endedMarch 31, 2020 |
Adjusted Operating Expenses |
|
|
|
GAAP
Operating Expenses (2) |
|
169.5 |
|
|
|
247.6 |
|
Acquisition - amortization of intangible assets |
|
(15.2 |
) |
|
|
(15.1 |
) |
Impairment of goodwill and intangibles |
|
- |
|
|
|
(98.4 |
) |
Equity compensation |
|
(8.5 |
) |
|
|
(7.9 |
) |
Transformation initiatives |
|
(7.5 |
) |
|
|
(2.8 |
) |
Other adjustments |
|
(11.3 |
) |
|
|
2.3 |
|
Adjusted
Operating Expenses |
$ |
127.0 |
|
|
$ |
125.7 |
|
(2) Consists of research and development expense, change in the
fair value of contingent consideration, selling, general, and
administrative expense, and goodwill and intangible asset
impairment charges from the condensed consolidated statements of
operations. |
|
|
|
|
|
|
|
|
Adjusted Operating Loss |
Three months endedMarch 31, 2021 |
|
Three months endedMarch 31, 2020 |
Operating
loss |
$ |
(46.7 |
) |
|
$ |
(133.7 |
) |
Acquisition - amortization of intangible assets |
|
15.2 |
|
|
|
15.1 |
|
Impairment of goodwill and intangibles |
|
- |
|
|
|
98.4 |
|
Equity compensation |
|
8.8 |
|
|
|
7.5 |
|
Transformation initiatives |
|
7.5 |
|
|
|
2.8 |
|
Other adjustments |
|
11.9 |
|
|
|
(2.3 |
) |
Adjusted operating loss |
$ |
(3.3 |
) |
|
$ |
(12.2 |
) |
|
|
|
|
|
|
|
|
Adjusted Net Loss |
|
|
|
Net
loss |
$ |
(39.5 |
) |
|
$ |
(115.2 |
) |
Acquisition - amortization of intangible assets |
|
15.2 |
|
|
|
15.1 |
|
Impairment of goodwill and intangibles |
|
- |
|
|
|
98.4 |
|
Equity compensation |
|
8.8 |
|
|
|
7.5 |
|
Transformation initiatives |
|
7.5 |
|
|
|
2.8 |
|
Other adjustments |
|
11.9 |
|
|
|
(3.3 |
) |
Tax impact of non-GAAP adjustments |
|
(8.8 |
) |
|
|
(11.6 |
) |
Adjusted net loss |
$ |
(4.9 |
) |
|
$ |
(6.3 |
) |
Weighted
average shares outstanding |
|
76.0 |
|
|
|
74.5 |
|
Adjusted net
loss per shares |
$ |
(0.06 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
Three months endedMarch 31, 2021 |
|
Three months endedMarch 31, 2020 |
Cash
flows from operations |
$ |
71.8 |
|
|
$ |
16.8 |
|
Capital expenditures |
|
(7.1 |
) |
|
|
(3.0 |
) |
Free cash
flow |
|
64.7 |
|
|
|
13.8 |
|
Transformation initiative costs |
|
7.1 |
|
|
|
2.8 |
|
Other adjustments |
|
0.2 |
|
|
|
- |
|
Tax effect associated with non-GAAP adjustments |
|
(1.8 |
) |
|
|
(0.8 |
) |
Adjusted Free cash flow |
$ |
70.2 |
|
|
$ |
15.8 |
|
|
|
|
|
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, including developed technology and database
rights.
- Impairment of goodwill and intangible: One-time impairment
charges on intangible assets and goodwill tied to company
acquisitions from prior years.
- Equity compensation – non-cash equity-based compensation
provided to Myriad employees.
- Transformation initiatives – transitory costs such as
consulting and professional fees related to Myriad’s Elevate 2020
program and transformation initiatives.
- Other adjustments – Other one-time non-recurring expenses
including expenses related to leadership transition, expenses
related to non-recurring severance and retention agreements,
non-recurring legal expenses and potential future consideration
related to acquisitions from prior years.
Tax impact associated with non-GAAP 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 CARES Act legislation.
Media Contact: |
|
Jared Maxwell |
|
Investor Contact: |
|
Scott Gleason |
|
|
(801) 505-5027 |
|
|
|
(801) 584-1143 |
|
|
jmaxwell@myriad.com |
|
|
|
sgleason@myriad.com |
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