On August 4, 2022 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its second quarter ended June 30, 2022 and provided an update on business performance (Press release, Myriad Genetics, AUG 4, 2022, View Source [SID1234617577]).

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"We are pleased with our progress this quarter as we advance our strategic operating plan to drive long term growth and profitability. Our team continues to execute on a disciplined approach to growing our business while managing gross margins and operating expenses despite significant wage and supply chain inflationary pressures. We are particularly excited about the progress of our Mental Health business, as Myriad’s GeneSight Psychotropic test quarterly volumes grew 39% year-over-year and 13% sequentially. We believe this momentum can be sustained as providers and payers digest the positive results of the PRIME Care study where both co-primary endpoints were achieved and remission rates for major depressive disorders showed significant improvement when clinicians had access to GeneSight test results," said Paul J. Diaz, president and CEO, Myriad Genetics.

Mr. Diaz went on to comment, "We also see continued stabilization and opportunities in the marketplace to grow our hereditary cancer and prenatal businesses and are excited about the growth we continue to see in our companion diagnostic business and our prostate cancer prognostic test – Prolaris. I want to thank the entire Myriad Genetics team and our provider partners for their continued efforts to serve our patients and execute on our transformation plan to enhance our product offerings, the experience of our customers and access for our patients."

Financial and Operational Highlights:

Diagnostic test volumes of 260,000 in the second quarter of 2022 increased 9% year-over-year and 7% sequentially from the first quarter of 2022, excluding divested businesses. During the second quarter of 2022, the company’s hereditary cancer volumes stabilized, down 4% year-over-year as compared to the first quarter of 2022 when volumes were down 12% year-over-year.
The following table summarizes sequential and year-over-year quarterly volume changes in the company’s core product categories:

Overall, average selling price (ASP)1 in the second quarter of 2022 decreased 2% year-over-year and increased 2% sequentially, excluding divested businesses.
Total revenue in the second quarter of 2022 was $179.3 million, an increase of 7% year-over-year and 9% sequentially, excluding the divested business revenue from Myriad RBM, Autoimmune and myPath Melanoma. Total revenue was negatively impacted by approximately $2.0 million in the quarter and $3.0 million year-to-date as a result of fluctuations in foreign exchange rates compared to the the prior year. Excluding divestitures, revenue for the six months ended June 30, 2022, increased 9% to $343.9 million compared to revenue for the six months ended June 30, 2021, which is in line with the company’s long term revenue guidance of 9 to 12%.
The following table summarizes year-over-year quarterly revenue changes in the company’s core businesses by product category:
GAAP gross margin in the second quarter of 2022 was 72.3%; adjusted gross margin in the quarter was 72.4%, which improved 30 basis points year-over-year.
GAAP total operating expenses in the second quarter of 2022 were $147.4 million, decreasing $9.1 million year-over-year; adjusted operating expenses in the quarter increased $2.2 million year-over-year to $125.3 million.
GAAP operating loss in the second quarter of 2022 was $17.8 million, improving $3.0 million year-over-year; adjusted operating income was $4.5 million, down $9.0 million year-over-year from $13.5 million.
Diluted GAAP EPS in the second quarter of 2022 were $(0.18), decreasing $0.12 year-over-year; adjusted EPS were $0.04, decreasing $0.08 year-over-year from $0.12.
Ended the second quarter of 2022 with $283.6 million in cash, cash equivalents and investments as compared to $339.2 million at the beginning of the quarter. The decrease of $55.6 million was driven primarily by a $48.0 million payment in connection with the settlement of the qui tam lawsuit filed in 2016. The company ended the quarter with no debt outstanding.
Business Performance and Highlights:

Oncology
The Myriad Genetics Oncology business provides hereditary cancer testing, including the MyRisk hereditary cancer test for patients who have cancer. It also provides tumor profiling products such as the myChoice CDx companion diagnostic test, the Prolaris prostate cancer test, and the EndoPredict breast cancer prognostic test. The Oncology business delivered revenue of $76.1 million in the second quarter of 2022, a decrease of 3% year-over-year and an increase of 9% sequentially from the first quarter of 2022.

Myriad Genetics recently launched Precise Oncology Solutions, which combines the company’s MyRisk germline cancer testing technology and its myChoice CDx companion diagnostic test with Precise Tumor, a tumor profiling test powered by Illumina, Inc.’s TruSight Oncology 500 (TSO500) assay and processed by Intermountain Precision Genomics.
MyChoice CDx reported its highest quarterly volume level in the United States ever in the second quarter of 2022 with quarterly volumes up 63% year-over-year and 10% sequentially from the first quarter of 2022.
Prolaris is a prostate cancer prognostic test designed to assess prostate cancer aggressiveness. The Oncology business achieved its highest quarterly Prolaris volumes in the second quarter of 2022, beating its previous quarterly volume record by 6%.
Women’s Health
The Myriad Genetics Women’s Health business serves women of all ancestries by assessing their risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family. The Women’s Health business delivered revenue of $70.1 million in the second quarter of 2022, an increase of 4% year-over-year and 7% sequentially from the first quarter of 2022.

Hereditary Cancer
Myriad Genetics continues to address the health inequities and accessibility challenges that exist within the hereditary cancer testing market. Myriad Genetics’ MyRisk hereditary cancer test with RiskScore for all ancestries offers the first and only personalized 5-year and lifetime breast cancer risk assessment for all women, including those of non-European ancestry. RiskScore is available at no additional cost to women who take the MyRisk test.
Prenatal
Myriad Genetics offers its Prequel noninvasive prenatal screen (NIPS), including proprietary AMPLIFY technology, which significantly enhances the test’s performance and works to reduce test failure rates so that patients may avoid unnecessary invasive procedures.
The company also offers its Foresight carrier screen to provide critical genetic insights for patients of all ethnicities.
Mental Health
The Myriad Genetics Mental Health business consists of the GeneSight psychotropic test that covers 64 medications commonly prescribed for depression, anxiety, attention deficit hyperactivity disorder, and other psychiatric conditions. GeneSight helps physicians understand how genetic alterations impact patient response to antidepressants and other drugs. In the pharmacogenomics category, GeneSight recorded revenue of $33.1 million in the second quarter of 2022, an increase of 46% year-over-year and 13% sequentially from the first quarter of 2022.

For the second quarter of 2022, the Mental Health business achieved its highest quarterly GeneSight volumes, beating its previous quarterly volume record by more than 10%.
In July of 2022, the Journal of the American Medical Association published results from the PRIME Care study — the largest pharmacogenomics randomized controlled trial ever conducted in mental health. The study, funded and conducted by the U.S. Department of Veterans Affairs, achieved both of its co-primary endpoints and found that major depressive disorder remission rates were significantly improved when clinicians had access to GeneSight Psychotropic test results. The PRIME Care study further reinforces the body of evidence supporting the clinical utility of pharmacogenomics testing and the GeneSight test as important tools for medication selection in the treatment of major depressive disorder and other mental illnesses.
Key Accomplishments in the Quarter
Myriad Genetics saw additional developments in the second quarter of 2022 including:

Myriad Genetics announced a partnership with Epic Systems Corporation (Epic), the industry leading healthcare software company, to integrate the company’s full line of genetic testing solutions with Epic’s expansive network of 600,000 physicians and more than 250 million patients. We believe the partnership bolsters Myriad Genetics’ growth plans of scaling customer-centric, tech-enabled commercial capabilities with over 600 electronic health record integrations this year.
The company presented multiple studies and showcased Precise Oncology Solutions at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting, demonstrating the value of genetic testing in guiding and clarifying cancer treatment and risk assessment.
Myriad Genetics was selected to participate in United Healthcare’s Preferred Laboratory Network (PLN), effective July 1, 2022. The PLN consists of currently contracted independent, freestanding laboratory care providers that have met higher standards for access, cost, data, quality and service, based on a rigorous application and review process.
The company announced an expansion of its strategic partnership with Intermountain Precision Genomics to add a new liquid biopsy therapy selection test to its growing oncology portfolio. The liquid biopsy test will use Illumina’s TSO500 ctDNA assay and be processed by Intermountain Precision Genomics. The new Precise liquid biopsy offering is expected to be available in 2023.
Myriad Genetics released its first environmental, social and governance report outlining actions taken to expand access to genetic testing, advance social justice, and increase environmental sustainability.
Myriad Genetics’ fiscal year 2022 non-GAAP guidance begins with the comparable GAAP financial measure and excludes the estimated impact of stock-based compensation expense of approximately $40.0 million, non-cash amortization associated with acquisitions of approximately $40.0 million and special items such as costs related to transformation initiatives of approximately $15.0 million. 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 reiterates its fiscal year 2022 revenue and gross margin guidance and updates its guidance for total operating expense and earnings per share. The company is increasing its fiscal year 2022 operating expense guidance by approximately $20.0 million. As a result of current market conditions, the company plans to make opportunistic incremental investments in research and development, technology and sales and marketing programs to access available market share and support its growth initiatives. Inclusive of these additional investments, Myriad’s updated fiscal year 2022 total operating expense guidance reflects a 6% — 8% year-over-year increase from fiscal year 2021 total operating expense, excluding divested businesses. This increase remains in line with current inflationary trends and demonstrates strong cost management even as the company invests in additional commercial and innovation initiatives.
Myriad Genetics will host its 2022 Investor Day at the NASDAQ MarketSite in New York City on August 11, 2022. Investor Day presentations and Q&A will take place from 10:00 a.m. to 12:00 p.m. EDT. For those unable to attend in person, a webcast will be available at the investor site on www.myriad.com.

Conference Call and Webcast
A conference call will be held today, Thursday, August 4, 2022, at 4:30 p.m. EDT to discuss Myriad Genetics’ financial results and business developments for the second quarter 2022. The dial-in number for domestic callers is 1-800-918-9482. International callers may dial 1-212-231-2929. All callers will be asked to reference reservation number 22019815. An archived replay of the call will be available for seven days by dialing 1-800-633-8284 and entering the reservation number above. The conference call and slide presentation will be available through a live webcast at www.myriad.com.