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Myriad Genetics' (MYGN) Q1 Earnings & Revenues Top Estimates

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Myriad Genetics, Inc. MYGN reported adjusted loss per share of 15 cents for the first quarter of fiscal 2021 in contrast to earnings of 2 cents reported in the year-ago quarter. Adjusted loss per share was, however, narrower than the Zacks Consensus Estimate of a loss of 33 cents.

The quarter’s adjustments exclude one-time impairment charges from intangible assets and goodwill tied to company acquisitions, certain COVID-19-related expenses and the impact of Elevate 2020 program-related expenses, among others.

GAAP loss per share was 20 cents narrower than the prior-year quarter’s loss of 28 cents per share.

Overall, a sharp year-over-year decline in revenues stemming from the pandemic-related challenges affected the bottom line.

Revenues

Total revenues plunged 22.1% year over year to $145.2 million in the quarter under review. The figure, however, exceeded the Zacks Consensus Estimate by 7.9%. The company, despite facing a significant challenge from the global pandemic and its impact on elective testing volume, witnessed recovery in elective procedure trends and improved execution.

Notably, Myriad Genetics registered a 56% improvement in revenues on a sequential basis.

Total test volumes in the quarter was 209,000, reflecting a plunge of 12% year over year. However, volumes improved 40% on a sequential basis.

Quarter in Detail

Segment-wise, Molecular Diagnostic tests recorded total revenues of $135.7 million, down 21.1% year over year.

Within this segment, Hereditary Cancer testing revenues fell 22.9% year over year to $80.6 million. Vectra testing revenues were $9.1 million, down 17.3% year over year.

Further, GeneSight testing revenues fell 47.6% year over year to $11.9 million in the reported quarter. Prolaris tests raked in revenues of $6.4 million, down 1.5% year over year. Prenatal testing revenues came in at $16.5 million, down 29.8%.

EndoPredict testing revenues were, however, up 21.7% year over year to $2.8 million. Other testing revenues surged 200% to $0.6 million year on year. myChoice CDx testing revenues were up by a stupendous 500% year over year to $7.8 million.

Pharmaceutical and clinical service revenues in the quarter under review totaled $9.5 million, down 33.6% on a year-over-year basis.

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

Margin Trends

Gross margin in the quarter under review contracted 376 basis points (bps) to 69.6%.

Research and development expenses fell 17.4% year over year to $17.6 million. Selling, general and administrative expenses declined 8.4% to $124.1 million in the reported quarter.

Adjusted operating loss was $40.7 million compared with adjusted operating loss of $20.2 million in the year-ago quarter.

Financial Position

Myriad Genetics exited the first quarter of fiscal 2021 with cash and cash equivalents of $118.3 million compared with $163.7 million at the end of fiscal 2020. Long-term debt at the end of the first quarter of fiscal 2021 was $224.6 million compared with $224.4 million at the end of fiscal 2020.

Net cash used in operating activities at the end of the first quarter of fiscal 2021 was $59.3 million compared with net operating cash inflow of $15.8 million a year ago.

Guidance

Given the difficulty in predicting the future business trend, the company has not provided any financial guidance for the six-month transition period ending December 31.

Our View

Myriad Genetics exited first-quarter fiscal 2021 with better-than-expected results. Although overall bottom- and top-line performances were dismal, the sequential improvement in revenues is impressive. The stupendous improvement in myChoice CDx testing revenues along with improvements in EndoPredict and Other testing revenues look encouraging. Sequential improvement in overall revenues and testing volumes amid the pandemic-led business disruptions bode well for the company.

However, dismal segmental performances along with decline in majority of testing revenues are disappointing. The company experienced gross margin contraction and incurred operating loss during the quarter, which are also discouraging. This time too, the company could not come up with any guidance, thus raising apprehensions.

Zacks Rank and Key Picks

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

Some other better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. WST, Thermo Fisher Scientific Inc. TMO and Align Technology, Inc. ALGN.

West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher, a Zacks Rank #2 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.

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