On March 3, 2021 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its quarter ended March 31, 2021 and provided an update on recent business performance (Press release, Myriad Genetics, MAY 3, 2021, View Source [SID1234579004]).

Financial Highlights:
Myriad Genetics delivered total revenue in the quarter of $173.1 million which grew 6% year-over-year and increased 12% sequentially from the fiscal quarter ending December 31, 2020.

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Total test volumes of 236,000 declined 1% year-over-year but increased 5% sequentially. Average U.S. revenue per test increased 2% sequentially, reflecting an increasingly stable pricing environment. Average selling prices benefitted in the quarter from Medicare back pay revenue for the Prolaris test for prostate cancer.
GAAP gross margin was 70.9% and adjusted gross margin was 71.5%. Adjusted gross margin improved 140 basis points sequentially, impacted positively by test pricing and negatively by increased revenue mix from prenatal testing and lower margin pharmaceutical and clinical service revenue.
GAAP total operating expenses were $169.5 million. Total adjusted operating expenses increased $1.3 million year-over-year to $127.0 million.
GAAP operating loss in the quarter was ($46.7) million; adjusted operating loss of ($3.3) million.
GAAP earnings per share (EPS) were ($0.52); adjusted EPS were ($0.06) which improved by $0.06 sequentially.
Free cash flow in the quarter was $64.7 million and was driven by a significant federal tax refund of approximately $90 million. The company ended the quarter with $188.0 million in cash, cash equivalents and investments and $157.0 million drawn on its revolving credit facility.
Business Performance and Highlights

Women’s Health
The Myriad Women’s Health business — which serves women assessing their risk of cancer, and those who are pregnant or planning a family — recorded revenue of $55.2 million in the quarter, a decline of 15% year-over-year. Elective testing for hereditary cancer has been negatively impacted by the COVID-19 pandemic due to delayed elective office visits. The company’s prenatal business continued to demonstrate strong growth trends with test volumes increasing 9% year-over-year and 7% sequentially.

Myriad myRisk Hereditary Cancer
myRisk Hereditary Cancer test volumes for the Women’s Health business in the U.S. declined 25% year-over-year largely due to the impact of the pandemic.
Myriad Foresight Carrier Screen and Myriad Prequel Prenatal Screen
Myriad’s proprietary AMPLIFY technology, which further increases the performance of its Prequel noninvasive prenatal screening (NIPS) test, is leading to increased new prenatal users and test utilization. Since the launch of the AMPLIFY technology in July, Myriad has seen an increase of 12% in the total number of ordering providers for prenatal testing services, including Prequel and Foresight, with 11% growth in total test utilization per provider.
Oncology
The Myriad Oncology business provides hereditary cancer testing for patients who have cancer, and products such as the EndoPredict breast cancer prognostic test, the Prolaris prostate cancer test, and the myChoice CDx and BRACAnalysis CDx companion diagnostic tests for predicting response to PARP inhibitors. The Oncology business delivered total revenue of $75.6 million, up 39% relative to revenue in the March quarter of last year.

Myriad myRisk Hereditary Cancer
myRisk Hereditary Cancer test volumes for the Oncology business in the U.S. declined 9% year-over-year.
Myriad Prolaris Prostate Cancer
Presented new data at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Conference demonstrating the Prolaris test can accurately predict which patients will benefit from multi-modality therapy. Using the newly established threshold, 27% of men with newly diagnosed high-risk disease and 73% with unfavorable intermediate-risk disease could avoid multimodality therapy.
Myriad BRACAnalysis CDx and myChoice CDx
Saw significant increases in BRACAnalysis CDx and myChoice CDx test volume in Japan with total revenue from the country increasing more than four-fold year-over-year to $11.9 million.
Received new reimbursement for the myChoice diagnostic system in Japan effective January 1, 2021.
New Tumor Profiling Product:
Announced new partnership with Intermountain Precision Genomics, powered by technology from Illumina (NASDAQ: ILMN), for a comprehensive offering of germline and somatic tumor testing services. The strategic collaboration combines germline genetic testing, next-generation tumor sequencing and world-class testing capabilities to elevate global precision oncology care.
Mental Health
Myriad’s Mental Health business — which consists of the GeneSight psychotropic test that helps physicians understand how genetic alterations impact response to antidepressant and other psychotropic medications — saw revenue of $17.6 million in the quarter compared to $20.4 million in the same period last year. Test volume for GeneSight was up 17% sequentially.

Myriad GeneSight
Saw a strong increase in new ordering providers with over 2,600 physicians ordering GeneSight for the first time in the quarter, up 24% sequentially. Overall, the number of ordering physicians increased 10% sequentially and test utilization per provider increased 4% sequentially despite the strong growth in new ordering providers.
Published a new study in Psychiatry Research demonstrating that the combinatorial approach available in the GeneSight Psychotropic test is better than single-gene testing at predicting patient outcomes and medication blood levels.
Autoimmune
Myriad’s Autoimmune business — which consists of the Vectra test for measuring disease activity in rheumatoid arthritis — generated revenue of $10.7 million in the quarter compared to $10.5 million in the same period last year.

Vectra
Signed a definitive agreement to sell select operating assets and intellectual property (IP), including the Vectra test, from Myriad Autoimmune’s business unit to Laboratory Corporation of America Holdings (NYSE: LH) for $150.0 million in cash. The deal is expected to close by the end of the third quarter of calendar year 2021.
Other
Other revenue – comprised of Myriad RBM contract research services for the pharmaceutical industry and the myPath Melanoma diagnostic test in dermatology — was $14.0 million in the March quarter versus $14.0 million in the same period in the prior year.

Signed a definitive agreement to sell the Myriad myPath, LLC, Laboratory, which is the laboratory that offers the myPath Melanoma test, to Castle Biosciences, Inc. for $32.5 million in cash. The transaction is expected to close in the second quarter of calendar year 2021.
The company generated $2.5 million in the quarter from COVID-19 testing services. Given the declining demand for testing in the United States, Myriad does not expect to have significant COVID-19 testing revenue going forward.
Investor Day
Myriad will host an Investor Day tomorrow, May 4, 2021 at 11:00 am EDT, to provide an update on its transformation plan and growth initiatives. The Investor Day will be a virtual event hosted on the company’s website. The link to the Investor Day event and registration is under the investor relations section of the website.

Financial Guidance
Given the continued unpredictability surrounding the COVID-19 pandemic and the impact it has had on the healthcare environment, customer behavior and the ability to market tests to physicians, the company will not provide financial guidance for the quarter ending June 30, 2021 or fiscal year 2021.