Myriad Genetics, Inc. (NASDAQ:MYGN) is a leading genetic testing and precision medicine company dedicated to advancing health and well-being for all. The company develops and offers tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where genetic insights can significantly improve patient care and lower healthcare costs.

Myriad Genetics reported annual revenue of $678.4 million and a net loss of $112.0 million in its most recent fiscal year. The company's annual operating cash flow was -$106.3 million, and its annual free cash flow was -$151.6 million. These financial results reflect Myriad's ongoing investments in innovation, technology, and operational improvements to drive long-term growth and profitability.

In the first quarter of 2024, Myriad Genetics delivered strong financial and operational performance. The company reported revenue of $202.2 million, representing a 12% increase compared to the same period in the prior year. This growth was driven by a 16% increase in hereditary cancer testing revenue, a 22% increase in prenatal testing revenue, and a 21% increase in pharmacogenomics revenue, partially offset by a 16% decrease in tumor profiling revenue.

Myriad's adjusted gross margin for the first quarter of 2024 was 58.5%, an improvement of 80 basis points compared to the same period in the prior year. The company's adjusted operating expenses decreased by 4% year-over-year, reflecting the company's focus on operational efficiency and cost management. Myriad reported an adjusted EBITDA of $4.0 million and an adjusted EPS loss of $0.01 for the first quarter of 2024, a significant improvement compared to the prior year period.

Business Overview

Myriad Genetics operates in three key areas: Oncology, Women's Health, and Pharmacogenomics. The company's Oncology portfolio includes the MyChoice CDx and Precise Tumor tests, which provide comprehensive genomic profiling to guide cancer treatment decisions. In Women's Health, Myriad offers the MyRisk Hereditary Cancer test, which assesses an individual's risk of developing certain hereditary cancers, as well as the Foresight and Prequel prenatal screening tests.

The company's Pharmacogenomics segment is anchored by the GeneSight test, which helps healthcare providers determine the most appropriate medications for patients based on their genetic profile. Myriad has also recently expanded its Oncology offerings through the acquisition of Precise Tumor and Precise Liquid from Intermountain Precision Genomics, which will be integrated into the company's new state-of-the-art laboratory facility in Salt Lake City.

Myriad's strategic focus is centered on four key pillars: top-tier science and innovation, technology-enabled lab operations, an elevated customer experience, and scalable operations. The company has invested heavily in developing clinically validated products, automating and streamlining its laboratory processes, and enhancing the ease of doing business with Myriad through improved electronic medical record (EMR) integrations and customer-facing portals.

Geographical Breakdown and Revenue Drivers

Myriad Genetics generates the majority of its revenue from the United States, which accounted for 91% of total revenue in the first quarter of 2024. The company's international operations, primarily in Japan, contributed the remaining 9% of revenue.

In the first quarter of 2024, Myriad's hereditary cancer testing revenue increased by 16% year-over-year, driven by a 9% increase in testing volume and a 7% increase in average revenue per test. The company's prenatal testing revenue grew by 22% compared to the same period in the prior year, due to a 9% increase in testing volume and a 12% increase in average revenue per test, partially attributable to a retroactive coverage change by a payor for one of Myriad's prenatal products.

Pharmacogenomics revenue increased by 21% year-over-year, primarily due to a 13% increase in testing volume and a 7% increase in average revenue per test. In contrast, tumor profiling revenue decreased by 16% compared to the first quarter of 2023, largely driven by a decline in MyChoice CDx testing volumes, which was impacted by a strong performance in the prior-year period related to clinical studies.

Liquidity and Capital Resources

As of March 31, 2024, Myriad Genetics had $104.3 million in cash, cash equivalents, and marketable investment securities, and $41.3 million in available borrowing capacity under its asset-based revolving credit facility. The company's capital deployment strategy focuses on investing in research and development, technology, and strategic acquisitions to support its business strategy.

Myriad's management believes that the company's existing capital resources will be sufficient to meet its projected operating requirements for at least the next 12 months. However, the company's available capital resources may be consumed more rapidly than expected, or may be insufficient for its business needs, due to operational cash needs, capital expenditures, and litigation-related costs not covered by or above the limits set forth in its insurance.

Risks and Guidance

Myriad Genetics faces several risks, including potential changes in government or private insurer coverage and reimbursement levels for its tests, increased competition, and the ability to develop and commercialize new tests in a timely manner. The company is also subject to regulatory requirements, including the recent final rule issued by the FDA regarding the oversight of laboratory-developed tests (LDTs), which Myriad believes it is well-positioned to navigate due to its strong quality management systems and regulatory affairs expertise.

For the full year 2024, Myriad Genetics has provided guidance for revenue between $820 million and $840 million, representing annual growth between 9% and 11%. The company expects its gross margin to be between 69.5% and 70.5%, with adjusted operating expense growth between 5% and 7%, and adjusted earnings per share between breakeven and $0.05.

Conclusion

Myriad Genetics is well-positioned for long-term growth through its focus on innovation, technology-enabled operations, and an elevated customer experience. The company's strong first quarter performance, with double-digit revenue growth and improved profitability, demonstrates the success of its strategic initiatives. Myriad's diversified product portfolio, geographic reach, and commitment to clinical validation and regulatory compliance position it as a leader in the genetic testing and precision medicine industry. As the company continues to execute on its growth strategy, investors can expect Myriad Genetics to capitalize on the significant opportunities in the Oncology, Women's Health, and Pharmacogenomics markets.