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Myriad Genetics Inc. Message Board

  • into_something_good into_something_good Jul 27, 2014 4:26 PM Flag

    Crescendo subsidiary.

    Crescendo is projected to increase revenue to $13M in the June q., from $3.1M (one month's revenue) last q., and to $60M in fiscal 2015 (page 29 of last ER CC).

    Sentiment: Strong Buy

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    • In the last ER, Crescendo accounted for a loss of .08 per share as well as a .04 per share charge for the amortization of "Goodwill" which is added to the balance sheet to account for the excess over book value paid for the acquisition. If you back out this 0.12 per share, the adjusted earnings increase to 0.60 from 0.48 and the GAAP earnings increase to 0.55 from the reported 0.43.

      Most of the so-called "analysts" failed to analyze these numbers, which is par for the course. The analysts at TheStreet seem to be the only ones that understand a glimmer of MYGN's potential, raising their target price from 47.36 on 8/3 (before the ER) to 49.51 on 9/21.

      Going forward, while the amortization will continue until Goodwill has been eliminated from the balance sheet (management is passionate about having a pristine balance sheet with zero debt), Crescendo is projected to be profitable for future earnings after the q. ended 6/30/15.

      Sentiment: Strong Buy

      • 1 Reply to into_something_good
      • Analysts, like generals, tend to fight the last war. And analysts are rarely punished for missing the surprise around the corner. So yeah, Crescendo is a key part of the Myriad To Come, along with MyRisks. And it's still hard to predict how they'll do.

        I'd like to point out this NY Times article on something that may be seen as a downside of broad oncogene screening: http://www.nytimes.com/2014/09/23/health/finding-risks-not-answers-in-gene-tests.html?_r=0

    • The transcript of the ER CC is available at nasdaq.com; the audio at the MYGN site.

      Sentiment: Strong Buy

    • Crescendo is the subject of the latest MYGN press release, concerning presentations in Europe. The Crescendo Vectra DA test has been approved for CMS payments in the U.S. Expansion in Europe could at least double the revenue. Rheumatoid arthritis mainly afflicts the elderly, which makes Medicare an important source of revenue. In Europe, people tend to live longer, making a larger share of the population subject to the condition. The MYGN subsidiary in Europe (45 persons strong) will facilitate expansion in Europe.

      Sentiment: Strong Buy

      • 2 Replies to into_something_good
      • Well, except that while RA is life-long, it is incorrect to say that it "mainly affects the elderly." Onset of rheumatoid arthritis tends to be around 25 years younger than osteoarthritis.

      • Even Credit Suisse had kind words for Crescendo (5/12/14): "we continue to believe investors are under-appreciating the positive impact of the Crescendo acquisition".
        But C.S. missed the 900 lb. gorilla in the room: the 89 patents untouched by the Supreme Court. "We see continued uncertainty around the market share that MYGN will be able to retain". Of course, all the analysts, the journalists, and the dumb shorts that piled into MYGN, even after it bottomed at 20.02, also missed this gorilla.

        Sentiment: Strong Buy

 
MYGN
34.60+0.13(+0.38%)May 22 4:00 PMEDT