On November 7, 2024, Myriad Genetics Inc (MYGN, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. The company, a leader in genetic testing and precision medicine, reported a notable 11% increase in revenue year-over-year, reaching $213 million, surpassing the analyst estimate of $210.73 million. However, the company reported a GAAP net loss of $22.1 million, an improvement from the $61.3 million loss in the same quarter of 2023.
Company Overview
Myriad Genetics is a molecular diagnostics company that provides testing services designed to assess an individual's risk of developing a disease. The firm produces MyRisk, a 48-gene panel capable of identifying the elevated risk of developing 11 types of cancer. Other diagnostic products include BRACAnalysis CDx, GeneSight, and Prequel. The company also offers biomarker discovery and companion diagnostic services to pharma and biotech companies.
Performance and Challenges
The third quarter of 2024 marked the fifth consecutive quarter of double-digit year-over-year revenue growth for Myriad Genetics, driven by strong performances in Pharmacogenomics and Prenatal segments. However, the company faces challenges due to UnitedHealthcare's decision to discontinue coverage of multi-gene panel pharmacogenetic testing, including GeneSight, effective January 1, 2025. This decision could impact Myriad Genetics' revenue, as GeneSight generated approximately $10 million in the third quarter from UnitedHealthcare's commercial population.
Financial Achievements
Myriad Genetics reported an adjusted EBITDA of $14.1 million, a significant increase from $1.4 million in the third quarter of 2023. The company's gross margin improved to 70.2%, reflecting better operating leverage and improved average revenue per test. These achievements are crucial for sustaining growth and profitability in the competitive Medical Diagnostics & Research industry.
Key Financial Metrics
The company's operating expenses decreased by 13% year-over-year, primarily due to reduced legal costs. Operating loss improved to $20.0 million from $60.1 million in the previous year. The company's liquidity position remains strong, with $99.9 million in cash and cash equivalents and an additional $48.8 million available under its credit facility.
Commentary and Strategic Initiatives
“During the third quarter of 2024, we grew revenue by 11%, compared to the third quarter of 2023, representing a fifth consecutive quarter of double-digit year-over-year revenue growth and have now delivered 13% revenue growth year-to-date as compared to the same nine-month period in 2023,” said Paul J. Diaz, President and CEO of Myriad Genetics.
Myriad Genetics continues to focus on delivering profitable growth and free cash flow. The company is actively engaging with UnitedHealthcare to resolve the coverage issue for GeneSight and is optimistic about its strategic initiatives, including new product developments and collaborations, which are expected to drive future growth.
Analysis and Outlook
Myriad Genetics' strong revenue growth and improved financial metrics highlight its resilience and strategic execution in a challenging market environment. However, the potential loss of coverage for GeneSight by UnitedHealthcare poses a significant risk that could affect future revenues. The company's ability to navigate these challenges and capitalize on new opportunities will be crucial for sustaining its growth trajectory.
Explore the complete 8-K earnings release (here) from Myriad Genetics Inc for further details.
