Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing
and precision medicine, today announced financial results for its
second quarter ended June 30, 2024 and raised its previously
issued financial guidance on business performance for the full-year
2024.
“We are very proud to have delivered another quarter of strong
double digit year-over-year revenue growth in the second quarter of
2024. Our year-to-date 2024 revenue growth of 13% year-over-year,
following our 11% year-over-year revenue growth in calendar year
2023, and our 15% year-over-year revenue growth in the second
quarter 2024, demonstrate the sustainability of our organic growth
and gives us the confidence to raise our long-term revenue growth
target to 12%,” said Paul J. Diaz, President and CEO of Myriad
Genetics. “In the second quarter, we saw strong performance across
our portfolio, highlighted by increasing evidence of market share
gains in prenatal testing. We anticipate these trends to continue
as we move through the year and into 2025. In addition, second
quarter average revenue per test improved across our product
portfolio, benefiting from expanded coverage and our ongoing
efforts in revenue cycle management. We remain optimistic about the
evolution of our product portfolio as we continue to publish
additional clinical validation studies and launch new products. At
the same time, we continue to improve access and ease of use for
our customers, as we accelerate electronic medical record (EMR)
integrations for new customers and make meaningful progress in our
Labs of the Future initiative. Myriad Genetics is growing
profitably and delivering improved financial results, including a
17% year-over-year increase in gross profit of $147.1 million, cash
flow from operations of $2.6 million, and $16.4 million of adjusted
operating cash flow. All while continuing to invest in the
innovation required to achieve our mission and vision to reach more
patients with life-saving precision medicine.”
Financial and Operational Highlights
- Test volumes of 389,000 in the second quarter of 2024 increased
9% year-over-year.
- The following table summarizes year-over-year testing volume
changes in the company's core product categories:
|
Three months ended |
|
|
|
Six months ended |
|
|
(in thousands) |
June 30, 2024 |
|
June 30, 2023 |
|
% Change |
|
June 30, 2024 |
|
June 30, 2023 |
|
% Change |
Product volumes: |
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer |
73 |
|
71 |
|
3 |
% |
|
144 |
|
136 |
|
6 |
% |
Tumor profiling |
14 |
|
16 |
|
(13 |
)% |
|
28 |
|
32 |
|
(13 |
)% |
Prenatal |
173 |
|
154 |
|
12 |
% |
|
345 |
|
312 |
|
11 |
% |
Pharmacogenomics |
129 |
|
117 |
|
10 |
% |
|
253 |
|
227 |
|
11 |
% |
Total |
389 |
|
358 |
|
9 |
% |
|
770 |
|
707 |
|
9 |
% |
|
|
|
|
|
|
|
- The following table summarizes year-over-year revenue changes
in the company's core product categories:
|
Three months ended |
|
Six months ended |
(in millions) |
June 30, 2024 |
|
June 30, 2023 |
|
% Change |
|
June 30, 2024 |
|
June 30, 2023 |
|
% Change |
Product revenues: |
|
|
|
|
|
|
|
|
|
|
|
Hereditary cancer |
$ |
91.5 |
|
$ |
76.7 |
|
19 |
% |
|
$ |
179.6 |
|
$ |
152.4 |
|
18 |
% |
Tumor profiling |
|
32.6 |
|
|
36.0 |
|
(9 |
)% |
|
|
63.5 |
|
|
73.3 |
|
(13 |
)% |
Prenatal |
|
44.4 |
|
|
35.6 |
|
25 |
% |
|
|
88.7 |
|
|
71.8 |
|
24 |
% |
Pharmacogenomics |
|
43.0 |
|
|
35.2 |
|
22 |
% |
|
|
81.9 |
|
|
67.2 |
|
22 |
% |
Total |
$ |
211.5 |
|
$ |
183.5 |
|
15 |
% |
|
$ |
413.7 |
|
$ |
364.7 |
|
13 |
% |
|
|
|
|
|
|
|
- Gross margin of 69.6% in the second quarter of 2024 increased
110 basis points year-over-year, reflecting operating leverage and
improved average revenue per test. Adjusted gross margin in the
second quarter of 2024 was 70.1%, an increase of 110 basis points
year-over-year as the company's revenue cycle, Labs of the Future
and supply chain initiatives begin to take hold.
- Second quarter of 2024 operating expenses were $183.6 million.
Adjusted operating expenses were $140.8 million, increasing 6% over
the year ago period. This increase was driven by investments in
technology, product development and R&D. Adjusted operating
expenses accounted for 67% of total revenue in the second quarter
of 2024, down from 73% of total revenue in the second quarter of
2023.
- Operating loss in the second quarter of 2024 was $36.5 million,
improving $77.2 million year-over-year; adjusted operating income
in the second quarter of 2024 was $7.4 million, improving $14.2
million year-over-year.
Business Performance and Highlights
Oncology
The Oncology business delivered revenue of $82.2 million in the
second quarter of 2024.
- Second quarter 2024 hereditary cancer testing revenue in
Oncology grew 11% year-over-year, reflecting ongoing initiatives to
improve average revenue per test through payer coverage expansion
and revenue cycle process improvements that are reducing the
company's no pay rate.
- Second quarter 2024 tumor profiling revenue of $32.6 million
grew 5% compared to first quarter 2024 but decreased 10%
year-over-year, reflecting the ongoing challenging biopharma
environment, slow ramp of biopharma contracts executed in 2023, and
challenges in the international business.
- In July 2024, Myriad Genetics received a patent relating to
detecting circulating tumor DNA in patient fluid samples, which is
complementary to a patent granted earlier in the year for the
company’s methods of preparing cell-free DNA. Both of these patents
support advancing commercialization of the company's high
sensitivity tumor informed Molecular Residual Disease (MRD)
assay.
- In July 2024, Myriad Genetics entered into an agreement with
Personalis, Inc. (Nasdaq: PSNL) to cross-license patent estates
covering tumor-informed approaches to detect MRD. The agreement
helps solidify each company’s freedom to operate in the MRD market
and broadens patient access to the benefits of MRD testing.
- Announced a collaboration with GSK (NYSE: GSK) aimed at
improving access to homologous recombination deficiency (HRD)
diagnostic testing for high-grade serous ovarian cancer (HGSOC)
patients, leveraging Myriad Genetics' MyChoice HRD Plus and
MyChoice CDx Plus tests in nine countries outside the United
States.
- Myriad Genetics and QIAGEN (NYSE: QGEN) agreed to develop a
globally distributable kit-based test for analyzing HRD status to
support research into personalized medicine in multiple solid tumor
types, including ovarian cancer.
- In August 2024, Myriad Genetics announced that it further
advanced its international reorganization efforts, including the
closing of the sale of its EndoPredict business to Eurobio
Scientific. The reorganization of its international operations
better aligns company resources to its domestic opportunities while
continuing to serve key biopharma partners and patients globally
and builds on Myriad Genetics' efforts this year to accelerate
profitable business growth across its portfolio.
Women’s Health
The Women’s Health business delivered revenue of $86.3 million
in the second quarter of 2024.
- Second quarter 2024 hereditary cancer testing revenue in
Women's Health grew 31% year-over-year as more practitioners see
the benefit of incorporating MyRisk with RiskScore as part of a
comprehensive breast cancer risk assessment program.
- Prenatal testing revenue in the second quarter of 2024 grew 25%
year-over-year, reflecting market share gains, expanded coverage by
payers, and ongoing initiatives to improve average revenue per
test.
- Myriad Genetics launched the Universal Plus Panel for
Foresight® Carrier Screen, which includes 39 new conditions and
screens up to 272 genes associated with serious inherited
conditions.
- Ten abstracts, including four on FirstGene, have been accepted
to be showcased at the National Society of Genetic Counselors' 43rd
annual meeting, which begins on September 17, 2024, in New Orleans,
LA.
Pharmacogenomics
In the pharmacogenomics category, GeneSight test revenue was
$43.0 million in the second quarter of 2024.
- Second quarter 2024 GeneSight testing revenue grew 22%
year-over-year, reflecting ongoing initiatives to improve average
revenue per test.
- Currently, biomarker legislation for state-regulated plans has
passed in 15 states. In many of these states, commercial and
managed Medicaid payers have modified their coverage policies to
include GeneSight and Prolaris. Additionally, there are a number of
states that have legislation in process. Myriad Genetics continues
to see an increasing number of payors incorporating, or planning to
incorporate, GeneSight into their coverage. Notably, this includes
Blue Shield of California, a major commercial and managed Medicaid
plan, effective July 1, 2024.
Financial GuidanceMyriad Genetics does not
provide forward-looking guidance on a GAAP basis for the measures
on which it provides forward-looking non-GAAP guidance as the
company is unable to provide a quantitative reconciliation of
forward-looking non-GAAP measures to the most directly comparable
forward-looking GAAP measure, without unreasonable effort, because
of the inherent difficulty in accurately forecasting the occurrence
and financial impact of the various adjusting items necessary for
such reconciliations that have not yet occurred, are dependent on
various factors, are out of the company's control, or cannot be
reasonably predicted. Such adjustments include, but are not limited
to, real estate optimization and transformation initiatives,
certain litigation charges and loss contingencies, costs related to
acquisitions/divestitures and the related amortization, impairment
and related charges, and other adjustments. For example,
stock-based compensation may fluctuate based on the timing of
employee stock transactions and unpredictable fluctuations in the
company's stock price. Any associated estimate of these items and
its impact on GAAP performance could vary materially.
Below is a table summarizing Myriad Genetics' fiscal year 2024
financial guidance*:
(in
millions, except per share amounts) |
PRIORFY 2024 |
CURRENT FY 2024 |
|
Expected Year-Over-Year Change |
|
|
|
|
|
|
Revenue |
$820 - $840 |
$835 - $845 |
|
11% - 12% |
Gross margin % |
69.5% - 70.5% |
70.0% - 70.5% |
|
100 - 150 bps |
Adjusted OPEX |
$572 - $582 |
$575 - $585 |
|
6% - 8% |
Adjusted EBITDA** |
$20 - $30 |
$25 - $35 |
|
$36 - $46 |
Adjusted EPS*** |
$0.00 - $0.05 |
$0.08 - $0.12 |
|
$0.35 - $0.39 |
|
|
|
|
|
|
* |
Assumes currency
rates as of August 6, 2024. |
** |
Adjusted EBITDA is
defined as Net Income (loss) plus income tax expense (benefit),
total other income (expense), non-cash operating expenses, such as
amortization of intangible assets, depreciation, impairment of
long-lived assets, and share-based compensation expense, and
one-time expenses such as expenses from real estate optimization
initiatives, transformation initiatives, legal settlements, and
divestitures and acquisitions. |
*** |
Full-year 2024
adjusted EPS is based on a 91 million share count. |
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, Tuesday, August 6, 2024, at 4:30 p.m. EDT to
discuss Myriad Genetics’ financial results and business
developments for the second quarter 2024. A live webcast of the
conference call can be accessed on Myriad Genetics' Investor
Relations website at investor.myriad.com. To participate in the
live conference call via telephone, please register at
https://register.vevent.com/register/BI620080625d0e42be9b313c17391abf61.
Upon registering, a dial-in number and unique PIN will be provided
to join the conference call. Following the conference call, an
archived webcast of the call will be available at
investor.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, Foresight Universal Plus,
Precise Tumor, Precise Oncology Solutions, Precise Liquid, Precise
MRD, FirstGene, SneakPeek, SneakPeek Early Gender DNA Test,
SneakPeek Snap, Urosuite, Mygenehistory, 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. © 2024
Myriad Genetics, Inc. All rights reserved.
Revenue by Product (Unaudited)
|
Three months ended June 30, |
|
|
(in millions) |
|
2024 |
|
|
2023 |
|
|
|
WH |
ONC |
PGx |
Total |
|
WH |
ONC |
PGx |
Total |
|
% |
Hereditary Cancer |
$ |
41.9 |
$ |
49.6 |
$ |
— |
$ |
91.5 |
|
$ |
32.1 |
$ |
44.6 |
$ |
— |
$ |
76.7 |
|
19 |
% |
Tumor Profiling |
|
— |
|
32.6 |
|
— |
|
32.6 |
|
|
— |
|
36.1 |
|
— |
|
36.1 |
|
(10 |
)% |
Prenatal |
|
44.4 |
|
— |
|
— |
|
44.4 |
|
|
35.5 |
|
— |
|
— |
|
35.5 |
|
25 |
% |
Pharmacogenomics |
|
— |
|
— |
|
43.0 |
|
43.0 |
|
|
— |
|
— |
|
35.2 |
|
35.2 |
|
22 |
% |
Total Revenue |
$ |
86.3 |
$ |
82.2 |
$ |
43.0 |
$ |
211.5 |
|
$ |
67.6 |
$ |
80.7 |
$ |
35.2 |
$ |
183.5 |
|
15 |
% |
|
Six months ended June 30, |
|
|
(in millions) |
|
2024 |
|
|
2023 |
|
|
|
WH |
ONC |
PGx |
Total |
|
WH |
ONC |
PGx |
Total |
|
% |
Hereditary Cancer |
$ |
81.5 |
$ |
98.1 |
$ |
— |
$ |
179.6 |
|
$ |
67.4 |
$ |
85.0 |
$ |
— |
$ |
152.4 |
|
18 |
% |
Tumor Profiling |
|
— |
|
63.5 |
|
— |
|
63.5 |
|
|
— |
|
73.4 |
|
— |
|
73.4 |
|
(13 |
)% |
Prenatal |
|
88.7 |
|
— |
|
— |
|
88.7 |
|
|
71.7 |
|
— |
|
— |
|
71.7 |
|
24 |
% |
Pharmacogenomics |
|
— |
|
— |
|
81.9 |
|
81.9 |
|
|
— |
|
— |
|
67.2 |
|
67.2 |
|
22 |
% |
Total Revenue |
$ |
170.2 |
$ |
161.6 |
$ |
81.9 |
$ |
413.7 |
|
$ |
139.1 |
$ |
158.4 |
$ |
67.2 |
$ |
364.7 |
|
13 |
% |
|
Business Units:WH = Women’s HealthONC =
OncologyPGx = Pharmacogenomics
Product Categories:Hereditary Cancer – MyRisk,
BRACAnalysis, BRACAnalysis CDxTumor Profiling – MyChoice CDx,
Prolaris, Precise Tumor, EndoPredictPrenatal – Foresight, Prequel,
SneakPeekPharmacogenomics – GeneSight
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations (unaudited)(in millions, except per share amounts) |
|
|
Three months endedJune 30, |
|
Six months endedJune 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Testing revenue |
$ |
211.5 |
|
|
$ |
183.5 |
|
|
$ |
413.7 |
|
|
$ |
364.7 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of testing revenue |
|
64.4 |
|
|
|
57.8 |
|
|
|
128.9 |
|
|
|
117.0 |
|
Research and development expense |
|
27.1 |
|
|
|
21.2 |
|
|
|
52.7 |
|
|
|
43.7 |
|
Selling, general, and administrative expense |
|
144.9 |
|
|
|
140.7 |
|
|
|
284.9 |
|
|
|
292.4 |
|
Legal settlements |
|
— |
|
|
|
77.5 |
|
|
|
— |
|
|
|
77.5 |
|
Goodwill and long-lived asset impairment charges |
|
11.6 |
|
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
Total costs and expenses |
|
248.0 |
|
|
|
297.2 |
|
|
|
478.1 |
|
|
|
530.6 |
|
Operating loss |
|
(36.5 |
) |
|
|
(113.7 |
) |
|
|
(64.4 |
) |
|
|
(165.9 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income |
|
0.4 |
|
|
|
0.5 |
|
|
|
1.0 |
|
|
|
1.2 |
|
Interest expense |
|
(0.8 |
) |
|
|
(0.5 |
) |
|
|
(1.3 |
) |
|
|
(1.0 |
) |
Other |
|
(0.3 |
) |
|
|
(2.4 |
) |
|
|
1.6 |
|
|
|
(3.0 |
) |
Total other income (expense), net |
|
(0.7 |
) |
|
|
(2.4 |
) |
|
|
1.3 |
|
|
|
(2.8 |
) |
Loss before income tax |
|
(37.2 |
) |
|
|
(116.1 |
) |
|
|
(63.1 |
) |
|
|
(168.7 |
) |
Income tax (benefit)
expense |
|
(0.5 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
2.1 |
|
Net loss |
$ |
(36.7 |
) |
|
$ |
(116.1 |
) |
|
$ |
(62.7 |
) |
|
$ |
(170.8 |
) |
Net loss per share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.41 |
) |
|
$ |
(1.42 |
) |
|
$ |
(0.69 |
) |
|
$ |
(2.10 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
90.6 |
|
|
|
81.7 |
|
|
|
90.3 |
|
|
|
81.5 |
|
|
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Balance Sheets
(unaudited)(in millions, except share information) |
|
|
June 30,2024 |
|
December 31,2023 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
92.4 |
|
|
$ |
132.1 |
|
Marketable investment securities |
|
4.9 |
|
|
|
8.8 |
|
Trade accounts receivable |
|
117.8 |
|
|
|
114.3 |
|
Inventory |
|
26.1 |
|
|
|
22.0 |
|
Prepaid taxes |
|
18.4 |
|
|
|
17.0 |
|
Prepaid expenses and other current assets |
|
21.6 |
|
|
|
19.4 |
|
Assets held for sale |
|
10.4 |
|
|
|
— |
|
Total current assets |
|
291.6 |
|
|
|
313.6 |
|
Operating lease right-of-use
assets |
|
56.5 |
|
|
|
61.6 |
|
Property, plant and equipment,
net |
|
116.3 |
|
|
|
119.0 |
|
Intangibles, net |
|
319.5 |
|
|
|
349.5 |
|
Goodwill |
|
286.3 |
|
|
|
287.4 |
|
Other assets |
|
14.9 |
|
|
|
15.4 |
|
Total assets |
$ |
1,085.1 |
|
|
$ |
1,146.5 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
|
33.3 |
|
|
|
25.8 |
|
Accrued liabilities |
|
98.3 |
|
|
|
113.9 |
|
Current maturities of operating lease liabilities |
|
13.3 |
|
|
|
16.2 |
|
Liabilities held for sale |
|
4.0 |
|
|
|
— |
|
Total current liabilities |
|
148.9 |
|
|
|
155.9 |
|
Unrecognized tax benefits |
|
31.1 |
|
|
|
30.2 |
|
Long-term debt |
|
38.8 |
|
|
|
38.5 |
|
Noncurrent operating lease
liabilities |
|
91.2 |
|
|
|
97.4 |
|
Other long-term
liabilities |
|
34.6 |
|
|
|
41.3 |
|
Total liabilities |
|
344.6 |
|
|
|
363.3 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, 90.9 and 89.9
shares outstanding at June 30, 2024 and December 31, 2023,
respectively |
|
0.9 |
|
|
|
0.9 |
|
Additional paid-in capital |
|
1,435.8 |
|
|
|
1,415.5 |
|
Accumulated other comprehensive loss |
|
(4.0 |
) |
|
|
(3.7 |
) |
Accumulated deficit |
|
(692.2 |
) |
|
|
(629.5 |
) |
Total stockholders' equity |
|
740.5 |
|
|
|
783.2 |
|
Total liabilities and stockholders’ equity |
$ |
1,085.1 |
|
|
$ |
1,146.5 |
|
|
MYRIAD GENETICS, INC.AND
SUBSIDIARIESCondensed Consolidated Statements of Cash
Flows (unaudited)(in millions) |
|
|
Three months endedJune 30, |
|
Six months endedJune 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by (used in)
operating activities |
$ |
2.6 |
|
|
$ |
(0.9 |
) |
|
$ |
(16.0 |
) |
|
$ |
(34.1 |
) |
Net cash (used in) provided by
investing activities |
|
(6.4 |
) |
|
|
11.8 |
|
|
|
(13.5 |
) |
|
|
46.4 |
|
Net cash provided by (used in)
financing activities |
|
2.4 |
|
|
|
38.4 |
|
|
|
(6.4 |
) |
|
|
33.5 |
|
Effect of foreign exchange
rates on cash, cash equivalents, and restricted cash |
|
(0.7 |
) |
|
|
0.3 |
|
|
|
(1.5 |
) |
|
|
0.5 |
|
Change in cash and cash
equivalents classified as held for sale |
|
(2.3 |
) |
|
|
— |
|
|
|
(2.3 |
) |
|
|
— |
|
Net (decrease) increase in
cash, cash equivalents, and restricted cash |
|
(4.4 |
) |
|
|
49.6 |
|
|
|
(39.7 |
) |
|
|
46.3 |
|
Cash, cash equivalents, and
restricted cash at beginning of the period |
|
105.6 |
|
|
|
63.1 |
|
|
|
140.9 |
|
|
|
66.4 |
|
Cash, cash equivalents, and
restricted cash at end of the period |
$ |
101.2 |
|
|
$ |
112.7 |
|
|
$ |
101.2 |
|
|
$ |
112.7 |
|
|
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 2024 financial guidance, the
expectations of trends in financial performance to continue through
the year and into 2025, the company's long-term revenue growth
target, the company's expectation of additional market share gains
in prenatal testing, the company's plans to continue to publish
additional clinical validation studies and launch new products,
statements relating to the company improving access and ease of use
for customers as the company accelerates EMR integrations for new
customers and makes progress in its Labs of the Future initiative,
and that the company is growing profitably, delivering improved
financial results, and continuing to invest in the innovation
required to achieve its mission and vision to reach more patients
with life-saving precision medicine. 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; the
risk 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; 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
operating the company’s laboratory testing facilities and the
transition of such facilities to the company's new 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 or operating covenants under the company’s
credit or lending agreements; the risk that the company may not be
able to 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, 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 February 28, 2024 as
updated in the company's Quarterly Report on Form 10-Q filed with
the SEC on May 8, 2024, 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.
The company does not forecast GAAP operating expenses, net
income (loss) or earnings per share because it cannot predict
certain elements that are included in reported GAAP
results. Please see above under “Financial Guidance”
for a full explanation.
Reconciliation of GAAP to Non-GAAP Financial
Measuresfor the Three and Six Months Ended June
30, 2024 and 2023(unaudited data in millions, except per
share amounts)
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted Gross
Margin |
|
|
|
|
|
|
|
Gross Profit(1) |
$ |
147.1 |
|
|
$ |
125.7 |
|
|
$ |
284.8 |
|
|
$ |
247.7 |
|
Acquisition - amortization of intangible assets |
|
0.3 |
|
|
|
0.3 |
|
|
|
0.6 |
|
|
|
0.6 |
|
Equity compensation |
|
0.6 |
|
|
|
0.4 |
|
|
|
0.9 |
|
|
|
0.7 |
|
Transformation initiatives |
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
0.2 |
|
Other adjustments |
|
0.2 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
— |
|
Adjusted Gross Profit |
$ |
148.2 |
|
|
$ |
126.6 |
|
|
$ |
286.7 |
|
|
$ |
249.2 |
|
Adjusted Gross Margin |
|
70.1 |
% |
|
|
69.0 |
% |
|
|
69.3 |
% |
|
|
68.3 |
% |
(1) Consists of
total revenues less cost of testing revenue from the Condensed
Consolidated Statements of Operations. |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted Operating
Expenses |
|
|
|
|
|
|
|
Operating Expenses(1) |
$ |
183.6 |
|
|
$ |
239.4 |
|
|
$ |
349.2 |
|
|
$ |
413.6 |
|
Acquisition - amortization of intangible assets |
|
(10.2 |
) |
|
|
(10.3 |
) |
|
|
(20.6 |
) |
|
|
(20.6 |
) |
Goodwill and long-lived asset impairment charges |
|
(11.6 |
) |
|
|
— |
|
|
|
(11.6 |
) |
|
|
— |
|
Equity compensation |
|
(14.0 |
) |
|
|
(10.8 |
) |
|
|
(25.6 |
) |
|
|
(17.9 |
) |
Real estate optimization |
|
(2.3 |
) |
|
|
(3.5 |
) |
|
|
(3.5 |
) |
|
|
(11.0 |
) |
Transformation initiatives |
|
(2.0 |
) |
|
|
(2.7 |
) |
|
|
(4.0 |
) |
|
|
(6.8 |
) |
Legal charges, net of insurance reimbursement |
|
(0.5 |
) |
|
|
(77.9 |
) |
|
|
(0.4 |
) |
|
|
(78.2 |
) |
Other adjustments |
|
(2.2 |
) |
|
|
(0.8 |
) |
|
|
(3.6 |
) |
|
|
(1.2 |
) |
Adjusted Operating
Expenses |
$ |
140.8 |
|
|
$ |
133.4 |
|
|
$ |
279.9 |
|
|
$ |
277.9 |
|
(1) Consists of
research and development expense and selling, general and
administrative expense, goodwill and lived-asset impairment
charges, and legal settlements from the Condensed Consolidated
Statements of Operations. |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted Operating
Income (Loss) |
|
|
|
|
|
|
|
Operating Loss |
$ |
(36.5 |
) |
|
$ |
(113.7 |
) |
|
$ |
(64.4 |
) |
|
$ |
(165.9 |
) |
Acquisition - amortization of intangible assets |
|
10.4 |
|
|
|
10.7 |
|
|
|
21.1 |
|
|
|
21.3 |
|
Goodwill and long-lived asset impairment charges |
|
11.6 |
|
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
Equity compensation |
|
14.6 |
|
|
|
11.1 |
|
|
|
26.5 |
|
|
|
18.5 |
|
Real estate optimization |
|
2.3 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
11.0 |
|
Transformation initiatives |
|
2.1 |
|
|
|
2.9 |
|
|
|
4.0 |
|
|
|
7.0 |
|
Legal charges, net of insurance reimbursement |
|
0.6 |
|
|
|
77.9 |
|
|
|
0.5 |
|
|
|
78.2 |
|
Other adjustments |
|
2.3 |
|
|
|
0.8 |
|
|
|
4.0 |
|
|
|
1.2 |
|
Adjusted Operating Income
(Loss) |
$ |
7.4 |
|
|
$ |
(6.8 |
) |
|
$ |
6.8 |
|
|
$ |
(28.7 |
) |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted Net Income
(Loss)(1) |
|
|
|
|
|
|
|
Net Loss |
$ |
(36.7 |
) |
|
$ |
(116.1 |
) |
|
$ |
(62.7 |
) |
|
$ |
(170.8 |
) |
Acquisition - amortization of intangible assets |
|
10.4 |
|
|
|
10.7 |
|
|
|
21.1 |
|
|
|
21.3 |
|
Goodwill and long-lived asset impairment charges |
|
11.6 |
|
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
Equity compensation |
|
14.6 |
|
|
|
11.1 |
|
|
|
26.5 |
|
|
|
18.5 |
|
Real estate optimization |
|
2.3 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
11.0 |
|
Transformation initiatives |
|
2.1 |
|
|
|
2.9 |
|
|
|
4.0 |
|
|
|
7.0 |
|
Legal charges, net of insurance reimbursement |
|
0.6 |
|
|
|
77.9 |
|
|
|
0.5 |
|
|
|
78.2 |
|
Other adjustments |
|
2.3 |
|
|
|
0.8 |
|
|
|
2.5 |
|
|
|
1.2 |
|
Tax adjustments |
|
(2.7 |
) |
|
|
2.8 |
|
|
|
(3.0 |
) |
|
|
9.8 |
|
Adjusted Net Income
(Loss) |
$ |
4.5 |
|
|
$ |
(6.4 |
) |
|
$ |
4.0 |
|
|
$ |
(23.8 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
90.6 |
|
|
|
81.7 |
|
|
|
90.3 |
|
|
|
81.5 |
|
Diluted |
|
91.5 |
|
|
|
81.7 |
|
|
|
91.5 |
|
|
|
81.5 |
|
Adjusted Earnings (Loss) Per
Share |
|
|
|
|
|
|
|
Basic |
$ |
0.05 |
|
|
$ |
(0.08 |
) |
|
$ |
0.04 |
|
|
$ |
(0.29 |
) |
Diluted |
$ |
0.05 |
|
|
$ |
(0.08 |
) |
|
$ |
0.04 |
|
|
$ |
(0.29 |
) |
(1) To determine
Adjusted Earnings (Loss) Per Share, or adjusted EPS. |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
Net Loss |
$ |
(36.7 |
) |
|
$ |
(116.1 |
) |
|
$ |
(62.7 |
) |
|
$ |
(170.8 |
) |
Acquisition - amortization of intangible assets |
|
10.4 |
|
|
|
10.7 |
|
|
|
21.1 |
|
|
|
21.3 |
|
Depreciation expense |
|
4.3 |
|
|
|
2.7 |
|
|
|
8.8 |
|
|
|
5.6 |
|
Goodwill and long-lived asset impairment charges |
|
11.6 |
|
|
|
— |
|
|
|
11.6 |
|
|
|
— |
|
Equity compensation |
|
14.6 |
|
|
|
11.1 |
|
|
|
26.5 |
|
|
|
18.5 |
|
Real estate optimization(1) |
|
2.3 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
11.0 |
|
Transformation initiatives |
|
2.1 |
|
|
|
2.9 |
|
|
|
4.0 |
|
|
|
7.0 |
|
Legal charges, net of insurance reimbursement |
|
0.6 |
|
|
|
77.9 |
|
|
|
0.5 |
|
|
|
78.2 |
|
Interest expense, net of interest income(2) |
|
0.4 |
|
|
|
— |
|
|
|
0.3 |
|
|
|
(0.2 |
) |
Other adjustments |
|
2.6 |
|
|
|
3.2 |
|
|
|
2.5 |
|
|
|
4.2 |
|
Income tax (benefit) expense(3) |
|
(0.5 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
2.1 |
|
Adjusted EBITDA |
$ |
11.7 |
|
|
$ |
(4.1 |
) |
|
$ |
15.7 |
|
|
$ |
(23.1 |
) |
(1) Real estate
optimization includes $0.4 million and $0.9 million for the three
and six months ended June 30, 2024, respectively, and $5.8 million
of depreciation expense for the six months ended June 30, 2023. No
depreciation expense was included for the three months ended June
30, 2023. |
(2) Derived from
interest expense and interest income from the Condensed
Consolidated Statements of Operations. |
(3) Derived from
income tax (benefit) from the Condensed Consolidated Statement of
Operations. |
|
Adjusted Free Cash Flow
Reconciliationfor the Three Months Ended June 30,
2024 and 2023(unaudited data in millions)
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flow from
operations |
$ |
2.6 |
|
|
$ |
(0.9 |
) |
|
$ |
(16.0 |
) |
|
$ |
(34.1 |
) |
Real estate optimization |
|
3.0 |
|
|
|
3.5 |
|
|
|
9.2 |
|
|
|
11.0 |
|
Transformation initiatives |
|
2.1 |
|
|
|
2.9 |
|
|
|
4.0 |
|
|
|
1.3 |
|
Legal charges, net of insurance reimbursement |
|
0.6 |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
2.2 |
|
Contingent consideration payment |
|
5.8 |
|
|
|
— |
|
|
|
5.8 |
|
|
|
— |
|
Other adjustments |
|
2.3 |
|
|
|
— |
|
|
|
3.5 |
|
|
|
0.4 |
|
Adjusted operating cash
flow |
$ |
16.4 |
|
|
$ |
5.9 |
|
|
$ |
7.1 |
|
|
$ |
(19.2 |
) |
Capital expenditures |
|
(5.2 |
) |
|
|
(18.8 |
) |
|
|
(11.9 |
) |
|
|
(42.3 |
) |
Capitalization of internal-use software costs |
|
(3.7 |
) |
|
|
— |
|
|
|
(5.6 |
) |
|
|
— |
|
Adjusted free cash flow |
$ |
7.5 |
|
|
$ |
(12.9 |
) |
|
$ |
(10.4 |
) |
|
$ |
(61.5 |
) |
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.
- Equity compensation – non-cash equity-based compensation
provided to Myriad Genetics employees and directors.
- Real estate optimization – costs related to real estate
initiatives. Prior to the fourth quarter 2023 reporting period,
these costs were included in the transformation initiatives
category. With respect to the adjusted free cash flow
reconciliation, the cash flow effect of real estate optimizations
excludes non-cash items such as accelerated depreciation. These
costs include the following:
- For the three months ended June 30, 2024, additional rent as a
result of the build-out of our new laboratories in Salt Lake City,
Utah, and South Francisco, California, while maintaining our
current laboratories in those locations and testing and set-up
costs for equipment in our new facilities.
- For the three months ended June 30, 2023, additional rent as a
result of the build-out of our new laboratories in Salt Lake City,
Utah, and South San Francisco, California, while maintaining our
current laboratories in those locations.
- For the six months ended June 30, 2024, additional rent as a
result of the build-out of our new laboratories in Salt Lake City,
Utah, and South Francisco, California, while maintaining our
current laboratories in those locations and testing and set-up
costs for equipment in our new facilities, lease terminations
gains, net of lease termination losses, impairment charges and
other abandonment costs.
- For the six months ended June 30, 2023, additional rent as a
result of the build-out of our new laboratories in Salt Lake City,
Utah, and South San Francisco, California, while maintaining our
current laboratories in those locations, and accelerated
depreciation in connection with our decision to cease the use of
our former corporate headquarters in Salt Lake City, Utah.
- Transformation initiatives – costs related to transformation
initiatives including:
- For the three and six months ended June 30, 2024, consulting
and professional fees.
- For the three and six months ended June 30, 2023, consulting
and professional fees and severance costs related to
restructuring.
- Legal charges, net of insurance reimbursement – one-time legal
expenses, net of insurance reimbursement. 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:
- For the three months ended June 30, 2024, changes in the fair
value of contingent consideration related to acquisitions from
prior years, severance, and other consulting costs.
- For the three months ended June 30, 2023, primarily includes
changes in the fair value of contingent consideration related to
acquisitions from prior years.
- For the six months ended June 30, 2024, primarily includes a
gain recognized on acquisition, changes in the fair value of
contingent consideration related to acquisitions from prior years,
the reclassifications of cumulative translation adjustments to
income upon liquidation of an investment in a foreign entity,
severance, and costs incurred in connection with executive
personnel changes.
- For the six months ended June 30, 2023, consulting and
professional fees related to prior year acquisitions and changes in
the fair value of contingent consideration related to acquisitions
from prior years.
- For purposes of adjusted EBITDA, other adjustments include the
items listed above as well as amounts included in other
income/expense in the financial statements.
- Depreciation expense - depreciation expense recognized on our
fixed assets.
- Goodwill and long-lived asset impairment charges – for the
three and six months ended June 30, 2024, primarily the impairment
of assets held for sale related to the sale of the EndoPredict
business to Eurobio Scientific.
- Contingent consideration payment – for the three months ended
June 30, 2024, the payment of contingent consideration related to
the previous acquisition of Sividon Diagnostics GmbH.
- 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.
- As of June 30, 2024, a valuation allowance of $63.3 million was
not recognized for non-GAAP purposes given our historical and
forecasted positive earnings performance.
- As of June 30, 2023, a valuation allowance of $37.2 million was
not recognized for non-GAAP purposes given our historical and
forecasted positive earnings performance.
- For purposes of adjusted EBITDA, the income tax expense
adjustment includes the income tax expense (benefit) recognized in
the financial statements.
Media Contact: |
Megan Manzari(385) 318-3718megan.manzari@myriad.com |
Investor Contact: |
Matt Scalo(801) 584-3532matt.scalo@myriad.com |
Qiagen NV (NYSE:QGEN)
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