Myriad Genetics (MYGN) Posts Narrower-Than-Estimate Q2 Loss
Myriad Genetics, Inc. MYGN reported an adjusted loss of 8 cents per share in the second quarter of 2023 against the year-ago quarter’s earnings per share (EPS) of 4 cents. The metric was narrower than the Zacks Consensus Estimate of a loss of 10 cents.
The quarter’s adjustments exclude amortization expenses from acquiring intangible assets, transitory costs related to transformation initiatives and equity compensations.
The GAAP loss was $1.42 per share compared with the prior-year quarter’s loss of 18 cents.
Revenues
Total revenues rose 2.3% year over year to $183.5 million in the quarter under review. The figure missed the Zacks Consensus Estimate by 1.4%.
Testing volumes grew 17% year over year, excluding the contribution from the Early Gender DNA Test.
Quarter in Detail
Hereditary Cancer testing revenues fell 3% year over year to $76.7 million. Pharmacogenomics testing revenues were $35.2 million, up 6% year over year.
Tumor Profiling testing revenues were up 7% year over year to $36 million.
Prenatal testing revenues came in at $35.6 million, up 7% year over year.
Margin Trends
The gross margin in the quarter under review contracted 378 basis points (bps) to 68.5%.
Research and development expenses rose 4.4% year over year to $21.2 million. SG&A expenses increased 10.7% to $140.7 million in the reported quarter.
The adjusted operating loss in the quarter was $36.2 million compared with the adjusted operating loss of $17.8 million in the year-ago quarter.
Financial Position
Myriad Genetics exited the second quarter of 2023 with cash and cash equivalents of $102.8 million compared with $53.6 million at the end of the first quarter of 2023. At the end of the second quarter, the long-term debt was $38.4 million, while the company had no obligation in the first quarter.
Myriad Genetics, Inc. Price, Consensus and EPS Surprise
Myriad Genetics, Inc. price-consensus-eps-surprise-chart | Myriad Genetics, Inc. Quote
The cumulative net cash used in operating activities at the end of the second quarter was $34.1 million compared with the year-ago cumulative net operating cash outflow of $96.2 million.
Guidance
Myriad Genetics reaffirms its full-year 2023 guidance.
For 2023, the company expects revenues in the range of 730-$750 million. This indicates the projected annual growth of 8-11% over 2022. The Zacks Consensus Estimate for the same is pegged at $737.9 million.
The adjusted EPS is expected in the range of a loss of 36-24 cents. The Zacks Consensus Estimate for the metric is pegged at a loss of 33 cents per share.
Our Take
Myriad Genetics exited the second quarter of 2023 on a mixed note, with better-than-expected earnings and a revenue miss. The company witnessed a strong testing volume improvement across all its businesses, with the Hereditary cancer testing franchise registering 21% year-over-year, the third consecutive quarter of double-digit growth year-over-year.
Within the Mental Health segment, the GeneSight test achieved a solid uptick in the quarter, bringing approximately 4,000 new clinicians to order the test for the first time. In collaboration with SimonMed Imaging, one of the largest independent outpatient medical imaging providers and physician radiology practices in the United States, the company launched a new Breast Cancer Risk Assessment Program in the second quarter of 2023.
Meanwhile, a gross margin contraction and an operating loss due to mounting costs and expenses are concerning. Foreign exchange headwinds and stiff competition remain a concern.
Zacks Rank & 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 Penumbra, Inc. PEN, Integer Holdings Corporation ITGR and Intuitive Surgical, Inc. ISRG.
Penumbra, carrying a Zacks Rank of 1 (Strong Buy), reported second-quarter 2023 adjusted EPS of 43 cents, beating the Zacks Consensus Estimate by 53.6%. Revenues of $261.5 million outpaced the consensus mark by 3.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Penumbra has an estimated 2024 growth rate of 57.9%. PEN’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 94.2%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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