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Myriad Genetics (MYGN) Reports Loss in Q1, Gross Margin Down

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Myriad Genetics, Inc. MYGN reported adjusted loss per share of 3 cents for the first quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 5 cents. This compares to a loss of 6 cents reported a year ago.

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

GAAP loss per share was 26 cents compared with the prior-year quarter’s loss of 52 cents.

Revenues

Total revenues fell 4.7% year over year to $164.9 million in the quarter under review. However, the figure surpassed the Zacks Consensus Estimate by 3.9%.

Excluding divested business revenues, RBM, Autoimmune and myPath, first-quarter revenues increased 11% year over year.

Total test volumes in the quarter were 241,000, reflecting a rise of 10% year over year (excluding divested businesses). Sequentially, volume rose 2%.

Quarter in Detail

Segment-wise, Molecular Diagnostic tests recorded total revenues of $160.8 million, up 12% year over year.

Within this segment, Hereditary Cancer testing revenues fell 7% year over year to $70.9 million. Pharmacogenomics testing revenues were $29.3 million, up 66% year over year.

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

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 5% year over year to $32.5 million. Prenatal testing revenues came in at $31.9 million, up 35%.

Margin Trends

Gross margin in the quarter under review contracted 363 basis points (bps) to 70.9%.

Research and development expenses contracted 8.2% year over year to $21.2 million. Selling, general and administrative expenses fell 24.5% to $110.6 million in the reported quarter.

Adjusted operating loss was $14.9 million compared with an adjusted operating loss of $40.5 million in the year-ago quarter.

Financial Position

Myriad Genetics exited the first quarter of 2022 with cash and cash equivalents of $165.2 million compared with $258.4 million at the end of the fourth quarter of 2021. However, the company had no debt on its balance sheet at the end of the first quarter of 2022.

Cumulative net cash used by operating activities at the end of the first quarter of 2022 was $46.5 million compared with the year-ago cumulative net cash provided by operating activities of $71.8 million.

Guidance

The company has reiterated its 2022 guidance.

For 2022, the company expects revenues in the range of $670-$700 million. The Zacks Consensus Estimate for the same is pegged at $681.8 million.

Adjusted earnings per share (EPS) is expected in the band of a break-even level to 20 cents. The Zacks Consensus Estimate for the metric is pegged at 10 cents.

Our View

Myriad Genetics exited first-quarter 2022 with better-than-expected earnings and revenues. The spectacular improvement in Pharmacogenomics testing revenues along with growth in tumor profiling and Prenatal testing looks encouraging. Diagnostic test volumes of 241,000 in the first quarter of 2022 increased 10% year over year, which is impressive. The new technological capabilities, together with the product enhancements and new products rolled out in the reported quarter, are expected to improve the company’s competitive position and accelerate growth significantly. On the flip side, the year-over-year decline in revenues looks discouraging. The company witnessed increased inflationary pressure and labor costs due to staffing constraints and competition for talent as well as increased material costs due to global supply-chain disruption in the quarter. Contraction of gross margins is worrying too.

Zacks Rank and Key Picks

Myriad Genetics currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are UnitedHealth Group Incorporated UNH, Medpace Holdings, Inc. MEDP and Alkermes plc ALKS.

UnitedHealth, having a Zacks Rank #2 (Buy), reported first-quarter 2022 EPS of $5.49, which beat the Zacks Consensus Estimate by 1.7%. Revenues of $80.1 billion outpaced the consensus mark by 14.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UnitedHealth has an estimated long-term growth rate of 14.8%. UNH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 3.7%.

Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.

Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.

Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #2.

Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.


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