Myriad Genetics (MYGN) Q3 Loss Wider Than Expected, Revenues Top

Myriad Genetics, Inc. MYGN reported adjusted loss per share of 2 cents for the third quarter of 2021 versus the Zacks Consensus Estimate of earnings per share (EPS) of a cent. This compares to loss of 15 cents reported a year ago.

The quarter’s adjustments exclude certain acquisition-amortization of intangible asset expenses and equity compensation, among others.

GAAP EPS was 30 cents against the prior-year quarter’s loss of 20 cents.

Revenues

Total revenues rose 15.2% year over year to $167.3 million in the quarter under review. The figure exceeded the Zacks Consensus Estimate by 1.8%.

Notably, Myriad Genetics registered a 7.9% improvement in revenues on a sequential basis.

Total test volumes in the quarter were 252,000, reflecting a rise of 15% year over year. However, sequential volume was impacted by constraints in access to healthcare providers due to the COVID-19 pandemic, the impact of the Delta variant strain and typical summer seasonality.

Quarter in Detail

Segment-wise, Molecular Diagnostic tests recorded total revenues of $167.3 million, up 23% year over year.

Within this segment, Hereditary Cancer testing revenues fell 1% year over year to $79.4 million. Pharmacogenomics testing revenues were $24.1 million, up 103% year over year.

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

Myriad Genetics, Inc. price-consensus-eps-surprise-chart | Myriad Genetics, Inc. Quote

Tumor Profiling testing revenues rose 94% year over year to $32.9 million. Prenatal testing revenues came in at $23.6 million, up 42%. Autoimmune testing revenues totaled $7.3 million, down 20% year over year.

Margin Trends

Gross margin in the quarter under review expanded 187 basis points (bps) to 71.4%.

Research and development expenses rose 6.8% year over year to $18.8 million. Selling, general and administrative expenses climbed 45.2% to $180.2 million in the reported quarter.

Adjusted operating loss was $79.5 million compared with an adjusted operating loss of $40.7 million in the year-ago quarter.

Financial Position

Myriad Genetics exited the third quarter of 2021 with cash and cash equivalents of $295.2 million compared with $118.4 million at the end of the last-reported quarter. However, the company has no debt on its balance sheet at the end of the third quarter of 2021.

Cumulative net cash provided by operating activities at the end of the third quarter of 2021 was $28.1 million compared with the year-ago cumulative net cash used by operating activities of $12.5 million.

Guidance

Given the continued unpredictability surrounding the COVID-19 pandemic (and its variant strains), the company has not provided any financial guidance for the fourth quarter ending Dec 31 or full-year 2021.

Our View

Myriad Genetics exited third-quarter 2021 with better-than-expected revenues. The company registered revenue growth on both a year over year and sequential basis. The spectacular improvement in Pharmacogenomics testing revenues along with growth in tumor profiling and GeneSight test volumes looks encouraging. Further, the company continues to see increasing momentum from its Prequel noninvasive prenatal screening (NIPS) test, including proprietary AMPLIFY technology. Gross margin expansion looks impressive as well. However, the company incurred operating losses during the quarter. The company’s inability to provide any financial guidance raises apprehension.

Zacks Rank and Key Picks

Myriad Genetics currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. MEDP, Thermo Fisher Scientific Inc. TMO and West Pharmaceutical Services, Inc. WST.

Medpace, currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $1.29, surpassing the Zacks Consensus Estimate by 20.6%. Revenues of $295.57 million beat the Zacks Consensus Estimate by 1.2%. You can see the complete list of today’s Zacks #1 Rank stocks here

Thermo Fisher Scientific reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #1.

West Pharmaceutical Services, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $2.06, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the consensus mark by 3.2%.

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