On November 6, 2023 Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, reported financial results for its third quarter ended September 30, 2023 (Press release, Myriad Genetics, NOV 6, 2023, View Source [SID1234637040]). The Company also provided an update on its business performance and 2023 financial guidance.

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"For the third quarter and year-to-date 2023, Myriad Genetics generated revenue growth of 14% and 15% over the prior year periods, respectively, excluding prior period collections1. In the third quarter of 2023, we continued to gain share in hereditary cancer testing, reporting a fifth consecutive quarter of volume growth year-over-year, and saw an acceleration in growth in our prenatal testing business, generating 20% year-over-year volume growth, excluding our Sneakpeek Early Gender DNA Test," said Paul J. Diaz, president and CEO, Myriad Genetics. "With industry leading gross margins and diligent cash management, we believe we have demonstrated our commitment to achieving profitability all while growing the business. We also improved our financial flexibility by expanding our credit facility. We remain confident in our ability to achieve our goal of adjusted profitability by the fourth quarter 2023 and sustainable 10%+ annual revenue growth for this full year and beyond."

Financial and Operational Highlights:
•Test volumes of 356,000 in the third quarter of 2023 increased 40% year-over-year, or 18% excluding contributions from the SneakPeek Early Gender DNA Test.
•The following table summarizes year-over-year quarterly testing volume changes in the company’s core product categories:
Three months ended
September 30, 2023 Nine months ended
September 30, 2023 Three months ended
September 30, 2022 Nine months ended
September 30, 2022

Year-over-Year Year-over-Year Year-over-Year Year-over-Year
Product volumes:
Hereditary cancer
18 % 20 % 4 % (6) %
Tumor profiling (1) % 7 % 3 % (4) %
Prenatal 85 % 78 % 0 % (2) %
Pharmacogenomics
19 % 24 % 34 % 40 %
Total 40 % 41 % 12 % 8 %

•Excluding contributions from the SneakPeek Early Gender DNA Test:
◦Prenatal testing volumes in the third quarter 2023 increased 20% year-over-year and was flat sequentially. In the second quarter 2023 prenatal testing volumes increased 12% year-over-year and 1% sequentially.
•The following table summarizes year-over-year quarterly revenue changes in the company’s core businesses by product category:
Three months ended Nine months ended
(in millions)
September 30, 2023 September 30, 2022
% Change
September 30, 2023
September 30, 2022
% Change
Product revenues:
Hereditary cancer
$
86.5
$
70.5 23 %
$
238.9
$
220.6 8 %
Tumor profiling
30.2 30.8 (2) % 103.5 96.9 7 %
Prenatal 39.5 22.1 79 % 111.3 87.3 27 %
Pharmacogenomics
35.7 33.0 8 % 102.9 95.5 8 %
Total $ 191.9 $ 156.4 23 % $ 556.6 $ 500.3 11 %

•Year-over-year revenue growth in the third quarter of 2023 reflects a $7.1 million change of estimate1 in the current quarter versus $(5.3) million change of estimate1 in the third quarter of 2022, excluding these change of estimates1, third quarter 2023 revenue increased 14% year-over-year, and hereditary cancer testing revenue increased 13% year-over-year.
•GAAP gross margins of 70.0% in the third quarter of 2023; adjusted gross margins for the third quarter of 2023 was 70.4%, an increase of 140.0 basis points from the second quarter of 2023.
•GAAP total operating expenses in the third quarter of 2023 were $194.4 million. Adjusted operating expenses in the quarter were $137.3 million.

•GAAP operating loss in the third quarter of 2023 was $60.1 million, which factors in an accrual related to the settlement of the Ravgen litigation of which $5 million was paid on October 31, 2023, $5 million is payable on or before October 31, 2024, and $2.75 million is payable on or before October 31, 2025. An additional $21.25 million is contingent on whether Ravgen is successful in resolving all outstanding patent re-examinations and litigation. If payable, the contingent amount would be payable over a five year period beginning no earlier than 2026. The adjusted operating loss in the quarter was $2.2 million.
•Ended the third quarter of 2023 with $86.3 million in cash, cash equivalents and marketable investment securities and $23.5 million available to draw under the asset-based credit facility, or total liquidity of $109.8 million. In addition, in October 2023, Myriad Genetics exercised its option to increase the maximum principal amount of its asset-based credit facility by $25.0 million to a total of $115.0 million.

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, Precise Tumor molecular profile test and the EndoPredict breast cancer prognostic test. The Oncology business delivered revenue of $76.6 million in the third quarter of 2023.
•Third quarter hereditary cancer testing revenue and volumes in Oncology grew 21% and 15% year-over-year, respectively.
•Prolaris continued to see healthy demand as third quarter testing revenue and volumes grew 18% and 9% year-over-year, respectively. UnitedHealthcare has recently issued a positive medical policy covering Prolaris in the biopsy setting for all risk groups. This policy will take effect on January 1, 2024.
•Announced a collaboration with Memorial Sloan Kettering Cancer Center (MSK) to study the use of minimal residual disease (MRD) testing in breast cancer. The research project will use Myriad Genetics’ MRD testing platform, a tumor-informed high-definition assay that uses whole-genome sequencing to achieve high sensitivity and specificity for circulating tumor DNA (ctDNA). Myriad Genetics’ MRD test was selected for its anticipated higher sensitivity and specificity than many other ctDNA offerings.
•Integrated Absolute Risk Reduction (ARR) into the Prolaris Prostate Cancer Prognostic Test to help patients and providers make personalized treatment decisions regarding hormone therapy. Prolaris is the only biomarker test to quantify the benefits of adding androgen deprivation therapy (ADT) to radiation therapy (RT)2.

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 $79.6 million in the third quarter of 2023.
•Third quarter hereditary cancer testing volumes in Women’s Health grew 22% year-over-year, driven by competitive account wins and increased adoption by providers of MyRisk for patients whose family history puts them at a higher risk for cancer.
•Excluding contributions from the SneakPeek Early Gender DNA Test, prenatal testing volumes in the third quarter of 2023 grew 20% year-over-year.
•In collaboration with Onsite Women’s Health, a leading national provider of breast health services, we announced the launch of a new breast cancer risk assessment program to help more women understand their breast cancer risk. This program combines diagnostic imaging and genetic risk assessment utilizing MyRisk with RiskScore and patient education. The program is expected to enable affordable access to genetic testing and deliver personalized insights to better inform clinical decisions for millions of potential patients.
•MyRisk Hereditary Cancer Test with RiskScore now incorporates breast density using Tyrer-Cuzick version 8 (TCv8) to provide patients and providers with a more comprehensive look at their five-year and remaining lifetime risk for breast cancer. MyRisk with RiskScore is the first breast cancer risk model that includes breast density, personal/family clinical history and a polygenic risk score (PRS) based on genetically determined ancestry.
•As of October 2023, Myriad Genetics sold over 1 million SneakPeek Early Gender DNA Tests.
Pharmacogenomics
The Myriad Genetics Pharmacogenomics business consists of the GeneSight 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, the GeneSight test recorded revenue of $35.7 million in the third quarter of 2023.
•In the third quarter, Myriad Genetics added approximately 4,000 clinicians who ordered GeneSight for the first time.
•Enhanced GeneSight report will now include information on how a patient’s smoking status may impact their body’s metabolism of certain medications.

•Presented positive preliminary results from Phase 1 of a multi-phase study designed to better understand GeneSight’s ability to improve clinical outcomes and reduce healthcare costs. Based on data from over 20,000 patients in the Optum Labs Data Warehouse, in the first 180 days post GeneSight testing, total hospitalizations decreased by more than 25% and psychiatric hospitalizations decreased by more than 35%. Additional data and detail from this study is expected to be published in 2024.
•Building on a 2020 meta-analysis of the clinical utility of the GeneSight test, which included four prospective, controlled studies and 1,556 unique patients, Myriad Genetics has incorporated additional published studies to further measure the utility of combinatorial pharmacogenomics testing for the treatment of major depressive disorder (MDD). This updated meta-analysis continues to show that access to GeneSight improved MDD response and remission rates.