On May 03, 2016 Myriad Genetics, Inc. (NASDAQ:MYGN) reported financial results for its fiscal third-quarter 2016, provided an update on recent business highlights, provided fiscal-fourth quarter financial guidance and updated its fiscal year 2016 financial guidance (Press release, Myriad Genetics, MAY 3, 2016, View Source [SID:1234511830]).

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"For the fourth consecutive quarter we have exceeded our financial projections and the highlight of this quarter was strong growth from new products including Prolaris and Vectra DA," said Mark C. Capone, president and chief executive officer of Myriad. "Importantly, we made significant progress in securing new product reimbursement coverage this quarter, and coupled with positive developments in our other development programs, we remain confident in our ability to deliver on our five-year strategic goals."

Financial Highlights

Below are tables summarizing the financial results and revenue by product class for our fiscal third-quarter 2016:

Revenue
Fiscal Third-Quarter
($ in millions) 2016 2015 % Change
Molecular diagnostic testing revenue

Hereditary cancer testing revenue $ 156.3 $ 159.0 (2 %)

Vectra DA testing revenue 12.3 10.5 17 %

Prolaris testing revenue 5.2 0.5 940 %

Other testing revenue 3.6 3.0 20 %

Total molecular diagnostic testing revenue 177.4 173.0 3 %

Pharmaceutical and clinical service revenue 13.1 7.0 87 %

Total Revenue $ 190.5 $ 180.0 6 %


Income Statement
Fiscal Third-Quarter
($ in millions) 2016 2015 % Change
Total Revenue $ 190.5 $ 180.0 6 %

Gross Profit 150.3 143.7 5 %
Gross Margin 78.9 % 79.8 %

Operating Expenses 107.7 108.0 0 %

Operating Income 42.6 35.7 19 %
Operating Margin 22.4 % 19.8 %

Adjusted Operating Income 45.8 46.3 (1 %)
Adjusted Operating Margin 24.0 % 25.7 %

Net Income 32.6 21.4 52 %

Diluted EPS 0.44 0.29 52 %

Adjusted EPS $ 0.41 $ 0.40 3 %

Business Highlights

myRisk Hereditary Cancer
NCCN updated its professional guidelines for hereditary cancer to include additional surgical risk-reduction considerations for multiple genes on the myRisk Hereditary cancer panel including PALB2, BRIP1, RAD51C and RAD51D. Additionally, NCCN expanded criteria for hereditary pancreatic and prostate cancer increasing the number of patients in the United States eligible for testing in these indications to approximately 25,000.
At the Society for Gynecological Oncology (SGO) meeting in March, Myriad presented data in 381 endometrial cancer patients showing that myRisk Hereditary Cancer identified 60 percent more deleterious mutations than traditional single syndrome screening.
At the American College of Medical Genetics and Genomics annual meeting, Myriad presented data demonstrating that one of its proprietary myVision algorithmic variant classification tools, Pheno, could be utilized on a broader set of cancer risk genes with greater than 99.5 percent accuracy in classification of variants of unknown significance.

Vectra DA
Vectra DA volumes were up 18 percent year-over-year and 11 percent sequentially in the fiscal third-quarter with approximately 42,500 tests performed.
Expanded the successful practice integration pilot program to the national phase with our entire rheumatology sales team in the fiscal-third quarter.
Signed two private insurance contracts totaling 2 million additional covered lives for Vectra DA.

Prolaris/Urology
Prolaris sample volume was up 90 percent year-over-year and 21 percent sequentially with approximately 4,300 tests ordered.
Signed multiple additional private insurance contracts bringing our total covered private lives to 28 million.

myPath Melanoma
The second validation study on myPath Melanoma demonstrating a 90 percent diagnostic accuracy in differentiating melanoma from benign nevi has been submitted to a major dermatology journal and we anticipate acceptance in the fiscal fourth-quarter.
Additionally, the clinical utility study on myPath Melanoma has been submitted for publication and we also anticipate acceptance of this study in the fiscal fourth-quarter.

Companion Diagnostics
Presented data at the recent SGO meeting demonstrating that myChoice HRD predicted both progression free survival and overall survival in platinum treated ovarian cancer patients. The test also performed substantially better than any of the individual proprietary markers (LOH, TAI, LST) in isolation.
Announced a research collaboration with TESARO and Merck to evaluate myChoice HRD and Myriad’s other tumor tests to predict responders to an investigational combination therapy including Merck’s anti-PD-1 therapy KEYTRUDA and TESARO’s PARP inhibitor niraparib.
Announced a research collaboration with AbbVie in non-small cell lung cancer to utilize myChoice HRD and Myriad’s other new tumor companion diagnostics to help identify potential responders to veliparib.

International
International revenues were up 40 percent year-over-year in the third quarter and accounted for approximately five percent of total product revenue in the quarter.
The French government has established provisional funding for EndoPredict and other breast prognostic tests beginning in April. France represents a market opportunity of approximately 25,000 tests per year for EndoPredict.
Signed an agreement with Hospital Corporation of America in the United Kingdom covering testing for hereditary cancer, Tumor BRACAnalysis CDx, EndoPredict and Prolaris. HCA manages six hospitals seeing approximately 500,000 patients per year in the UK.

Share Repurchase
During the quarter, the Company repurchased approximately 1.2 million shares, or $45 million, of common stock under our share repurchase program and ended the quarter with approximately $47 million remaining on our current share repurchase authorization.

Fiscal Fourth-Quarter and Fiscal Full-Year 2016 Financial Guidance
Below is a table summarizing Myriad’s fiscal year 2016 and fiscal fourth-quarter 2016 financial guidance:

Revenue Adjusted Earnings Per Share GAAP Diluted Earnings Per Share
Fiscal Fourth-Quarter 2016 $186-$188 million $0.36-$0.38 $0.32-$0.34

Fiscal Year 2016 $753-$755 million $1.63-$1.65 $1.48-$1.50

The Company is providing fourth-quarter revenue guidance of $186 to $188 million and adjusted earnings per share of $0.36 to $0.38. As a result, the Company is narrowing the range for its fiscal full year revenue guidance to total revenue of $753 to $755 million and updating its adjusted earnings per share guidance to $1.63 to $1.65.

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during its conference call today to discuss the fiscal third-quarter financial results and fiscal fourth-quarter and fiscal year 2016 financial guidance.