Myriad Genetics ((MYGN)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Myriad Genetics painted a mixed picture, highlighting both challenges and areas of growth. While the company faced a revenue decline and specific issues with GeneSight and hereditary cancer testing, there were positive developments in prenatal testing and the product pipeline. However, the downward revision of the company’s guidance underscores significant challenges ahead.
Prenatal Testing Growth
Prenatal testing emerged as a bright spot for Myriad Genetics during the quarter, with revenue growth of 11% year-over-year. Excluding SneakPeak, the growth was even more impressive at 15%, driven by strong demand for ForeSight and Prequel tests. This segment’s performance provided a much-needed boost amid other challenges.
Oncology Test Volume Growth
The demand for the myRisk test for cancer patients remained robust, with test volume growth of 11% year-over-year. This indicates a continued strong interest in oncology testing, which is a critical area for Myriad Genetics.
Product Pipeline Progress
Myriad Genetics is on track to launch several new products, including its first gene combined carrier screening and NIPS assay within the next couple of months. Additionally, the company plans to introduce the first AI-enabled Prolaris test by the end of the year, signaling progress in its product pipeline.
Gross Margin Improvement
Despite the overall revenue decline, Myriad Genetics managed to expand its gross margins by 50 basis points, achieving a 69% gross margin. This improvement was attributed to efficiencies in their laboratory operations.
Revenue Decline
The company experienced a 3% decline in total revenue year-over-year, with significant underperformance in GeneSight and myRisk testing for unaffected patients in the women’s health channel. This decline highlights the challenges Myriad Genetics is facing in maintaining its revenue streams.
GeneSight Revenue Impact
GeneSight revenue was notably down by 20% year-over-year, primarily due to changes in UnitedHealthcare’s coverage policy and reduced commercial resources. This has been a significant factor in the company’s revenue challenges.
Hereditary Cancer Testing Challenges
Hereditary cancer testing revenue decreased by 2% for the quarter, impacted by slower-than-expected EMR integrations and a lower-than-expected ramp in testing volume. These challenges have contributed to the overall revenue decline.
Updated Financial Guidance
Myriad Genetics revised its 2025 financial guidance, projecting annual revenue between $807 million and $823 million, which is $35 million lower than the prior midpoint. Adjusted operating expenses are also expected to be reduced by $25 million. Despite these adjustments, the company remains optimistic about future growth driven by new product launches.
In conclusion, the Myriad Genetics earnings call highlighted a challenging quarter with revenue declines and specific issues in some testing areas. However, the company also showcased growth in prenatal testing and progress in its product pipeline. The revised financial guidance reflects the hurdles ahead, but Myriad Genetics remains focused on driving future growth through new product innovations.