GlobeNewswire Inc | May 3, 2021 04:05PM EDT

May 03, 2021

Highlights:

-- Revenue of $173.1 million increases 12% sequentially -- GAAP earnings per share of ($0.52), adjusted EPS of ($0.06) improves $0.06 sequentially -- Total test volumes increase 5% sequentially despite typical seasonality, with average revenue per test also increasing relative to the Dec. quarter -- Expect to close on the sale of the three planned business unit divestitures by the end of 3Q21 for total gross proceeds of approximately $375 million -- Company to host Investor Day on May 4th at 11 am EDT

Paul J. Diaz, President and Chief Executive Officer:Myriad Genetics returned to year-over-year top line growth in the March quarter through improved operational execution amidst the challenges of the COVID-19 pandemic. We saw strong sequential increases in test volumes and overall average selling prices despite the typical seasonality we experience in the March quarter. We also continued to execute on our strategic transformation plan and launched major strategic initiatives focused on improving customer experience, building new tech-enabled commercial capabilities, reducing complexity and cost, and elevating the potential of our products.

I am exceptionally proud of our 2,700 Myriad Genetics teammates who continue to embrace change and remain dedicated to our mission of improving health and wellbeing for all while expanding access to vital genetic insights. Together with the leadership team, I look forward to sharing an update on our strategy, transformation plan and growth initiatives, at our Investor Day tomorrow.

SALT LAKE CITY, May 03, 2021 (GLOBE NEWSWIRE) -- Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, today announced financial results for its quarter ended March 31, 2021 and provided an update on recent business performance. 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.

-- 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 $64.7million and was driven by a significant federal tax refund of approximately $90 million. The company ended the quarter with $188.0million in cash, cash equivalents and investments and $157.0million drawn on its revolving credit facility.

Business Performance and Highlights

Womens HealthThe Myriad Womens 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 companys 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 Womens 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 Myriads proprietary AMPLIFY technology, which further increases the performance of its Prequelnoninvasive 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.

OncologyThe 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 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 HealthMyriads 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.

AutoimmuneMyriads 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.

-- VectraSigned a definitive agreement to sell select operating assets and intellectual property (IP), including the Vectra test, from Myriad Autoimmunes 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.

OtherOther 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 $32.5million 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 DayMyriad 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 companys website. The link to the Investor Day event and registration is under the investor relations section of the website.

Financial GuidanceGiven 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.

About Myriad GeneticsMyriad Genetics Inc., is a leading genetic testing and precision medicine company dedicated to improving and transforming patient lives worldwide. Myriad discovers and commercializes molecular diagnostic tests that: determine the risk of developing disease, accurately diagnose disease, assess the risk of disease progression, and guide treatment decisions across medical specialties where molecular diagnostics can significantly improve patient care and lower healthcare costs. For more information, please visit the company's website:www.myriad.com.

Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, myPath, myRisk, Myriad myRisk, myRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice CDx, Vectra, Prequel, Foresight, GeneSight, riskScore and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its wholly owned subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G.

Revenue by Product (Unaudited):

Three months ended March 31, 2021 2020 (in millions) WH ONC MH AI Other Total WH ONC MH AI Other Total % ChangeMolecular diagnostic revenues: Hereditary Cancer Testing $ 31.5 $ 44.6 $ ? $ ? $ ? $ 76.1 $ 44.3 $ 40.9 $ ? $ ? $ ? $ 85.2 -10.7 %Prenatal 23.7 ? ? ? ? 23.7 20.3 ? ? ? ? 20.3 16.7 %GeneSight ? ? 17.6 ? ? 17.6 ? ? 20.4 ? ? 20.4 -13.7 %Vectra ? ? ? 10.7 ? 10.7 ? ? ? 10.5 ? 10.5 1.9 %myChoice CDx ? 8.4 ? ? ? 8.4 ? 3.3 ? ? ? 3.3 154.5 %Prolaris ? 18.5 ? ? ? 18.5 ? 6.8 ? ? ? 6.8 172.1 %EndoPredict ? 4.1 ? ? ? 4.1 ? 3.5 ? ? ? 3.5 17.1 %Other ? ? ? ? 0.5 0.5 ? ? ? ? 0.5 0.5 0.0 %Total molecular diagnostic 55.2 75.6 17.6 10.7 0.5 159.6 64.6 54.5 20.4 10.5 0.5 150.5 6.0 %revenuePharmaceutical and clinical ? ? ? ? 13.5 13.5 ? ? ? ? 13.5 13.5 0.0 %service revenueTotal revenue $ 55.2 $ 75.6 $ 17.6 $ 10.7 $ 14.0 $ 173.1 $ 64.6 $ 54.5 $ 20.4 $ 10.5 $ 14.0 $ 164.0 5.5 %

WH = Womens HealthONC = OncologyMH = Mental Health AI = Autoimmune

MYRIAD GENETICS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations (Unaudited)(In Millions, except per share amounts) Three months ended March 31, 2021 2020 Molecular diagnostic testing $ 159.6 $ 150.5 Pharma and clinical services 13.5 13.5 Total revenue 173.1 164.0 Costs and expenses: Cost of molecular diagnostic testing 44.1 43.1 Cost of pharmaceutical and clinical services 6.2 7.0 Research and development expense 23.1 19.7 Change in the fair value of contingent consideration 0.9 (3.4 ) Selling, general, and administrative expense 145.5 132.9 Goodwill and intangible asset impairment charges - 98.4 Total costs and expenses 219.8 297.7 Operating loss (46.7 ) (133.7 ) Other income (expense): Interest income 0.2 0.8 Interest expense (3.0 ) (2.3 ) Other (0.1 ) 4.1 Total other income (expense), net (2.9 ) 2.6 Loss before income tax (49.6 ) (131.1 ) Income tax benefit (10.1 ) (15.9 ) Net loss $ (39.5 ) $ (115.2 ) Net loss attributable to non-controlling interest - - Net loss attributable to Myriad Genetics, Inc. $ (39.5 ) $ (115.2 ) stockholdersLoss per share: Loss per share - basic $ (0.52 ) $ (1.55 ) Loss per share - diluted (0.52 ) (1.55 ) Weighted average shares outstanding: Basic 76.0 74.5 Diluted 76.0 74.5

MYRIAD GENETICS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in millions) March 31, December 31, 2021 2020 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 148.9 $ 117.0 Marketable investment securities 27.2 33.7 Prepaid expenses 14.0 11.7 Inventory 24.6 27.1 Trade accounts receivable 94.1 89.5 Prepaid taxes 18.1 108.4 Other receivables 2.3 2.0 Total current assets 329.2 389.4 Property, plant and equipment, net 45.1 40.7 Operating lease right-of-use assets 58.9 59.7 Long-term marketable investment securities 11.9 21.0 Intangibles, net 559.9 576.5 Goodwill 328.3 329.2 Other assets 3.6 2.3 Total assets $ 1,336.9 $ 1,418.8 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 20.8 $ 20.5 Accrued liabilities 83.1 79.1 Current maturities of operating lease 14.0 13.6 liabilitiesDeferred revenue 31.1 32.7 Total current liabilities 149.0 145.9 Unrecognized tax benefits 30.8 30.5 Long-term deferred taxes 59.2 71.3 Long-term debt 154.0 224.8 Noncurrent operating lease liabilities 49.4 50.6 Other long-term liabilities 19.3 14.7 Total liabilities 461.7 537.8 Commitments and contingencies Stockholders' equity: Common stock, 76.7 and 75.4 shares outstandingat March 31, 2021 and December 31, 2020, 0.8 0.8 respectivelyAdditional paid-in capital 1,144.5 1,109.5 Accumulated other comprehensive loss (3.6 ) (2.3 ) Accumulated deficit (266.5 ) (227.0 ) Total Myriad Genetics, Inc. stockholders' equity 875.2 881.0 Non-controlling interest - - Total stockholders' equity 875.2 881.0 Total liabilities and stockholders' equity $ 1,336.9 $ 1,418.8

MYRIAD GENETICS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited) (in millions) Three months ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss attributable to Myriad Genetics, $ (39.5 ) $ (115.2 ) Inc. stockholdersAdjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization 18.4 17.9 Non-cash interest expense 0.5 0.1 Gain on deconsolidation of subsidiary - (1.0 ) Gain on disposition of assets (0.3 ) (0.1 ) Share-based compensation expense 9.0 7.5 Non-cash lease expense 3.5 - Deferred income taxes (11.8 ) (16.0 ) Unrecognized tax benefits 0.3 (0.1 ) Impairment of goodwill and intangible - 98.4 assetsChange in fair value of contingent 0.9 2.1 considerationChanges in assets and liabilities: Prepaid expenses (2.1 ) 3.6 Trade accounts receivable (4.7 ) 15.9 Other receivables (0.3 ) 1.2 Inventory 2.4 (2.6 ) PrepaidtTaxes 90.3 (0.7 ) Other assets (1.2 ) - Accounts payable 0.3 9.2 Accrued liabilities 7.7 (3.6 ) Deferred revenue (1.6 ) 0.2 Net cash provided by operating activities 71.8 16.8 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (7.1 ) (3.0 ) Proceeds from sale of subsidiary - 21.3 Purchase of marketable investment - (15.8 ) securitiesProceeds from maturities and sales of 15.3 20.7 marketable investment securitiesNet cash provided by investing activities 8.2 23.2 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from common stock issued under 26.5 0.3 share-based compensation plansPayment of tax withheld for common stock (0.5 ) (0.1 ) issued under share-based comp planPayment of contingent consideration (3.3 ) - recognized at acquisitionFees associated with refinancing of (1.2 ) - revolving credit facilityRepayment of revolving credit facility (70.0 ) - Net cash provided by (used in) financing (48.5 ) 0.2 activitiesEffect of foreign exchange rates on cash 0.4 (1.9 ) and cash equivalentsChange in cash and cash equivalents - 1.5 classified as held for saleNet increase in cash and cash equivalents 31.9 38.3 Cash and cash equivalents at beginning of 117.0 81.2 the periodCash and cash equivalents at end of the $ 148.9 $ 121.0 period

Safe Harbor StatementThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to an increasingly stable pricing environment, AMPLIFYTM leading to new prenatal users and increased text utilization; the exploration of strategic alternatives for the Myriad RBM business; plans to host an Investor Day to provide an update on the companys strategic transaction plan on May 4, 2021; and the Companys strategic imperatives under the caption About Myriad Genetics. These forward-looking statements are managements present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described or implied in the forward-looking statements. These risks include, but are not limited to: uncertainties associated with COVID-19, including its possible effects on the Companys operations and the demand for its products and services; risks related to the Companys ability to efficiently and flexibly manage its business amid uncertainties associated with COVID-19; the risk that sales and profit margins of the Companys existing molecular diagnostic tests and pharmaceutical and clinical services may decline or that the Company may not be able to operate its business on a profitable basis; risks related to the Companys ability to generate sufficient revenue from its existing product portfolio or in launching and commercializing new tests; risks related to changes in the governmental or private insurers coverage and reimbursement levels for the Companys tests or the Companys ability to obtain reimbursement for its new tests at comparable levels to its existing tests; risks related to increased competition and the development of new competing tests and services; the risk that the Company may be unable to develop or achieve commercial success for additional molecular diagnostic tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that the Company may not successfully develop new markets for its molecular diagnostic tests and pharmaceutical and clinical services, including the Companys ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying the Companys molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating the Companys laboratory testing facilities; risks related to public concern over genetic testing in general or the Companys tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to the Companys ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to the Companys ability to successfully integrate and derive benefits from any technologies or businesses that it licenses or acquires; risks related to the Companys projections about the potential market opportunity for the Companys products; the risk that the Company or its licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying the Companys tests; the risk of patent-infringement claims or challenges to the validity of the Companys patents; risks related to changes in intellectual property laws covering the Companys molecular diagnostic tests and pharmaceutical and clinical services, or patents or enforcement, in the United States and foreign countries; risks of new, changing and competitive technologies and regulations in the United States and internationally; the risk that the Company may be unable to comply with financial operating covenants under the Companys credit or lending agreements; the risk that the Company will be unable to pay, when due, amounts due under the Companys credit or lending agreements; risks related to the material weakness identified in the Companys internal control over financial reporting, including the impact thereof and the Companys remediation plan; and other factors discussed under the heading Risk Factors contained in Item 1A of the Companys Transition Report on Form 10-K filed with the Securities and Exchange Commission on March16, 2021, as well as any updates to those risk factors filed from time to time in the Companys Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

Statement regarding use of non-GAAP financial measuresIn this press release, the Companys financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the Companys core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Companys business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached schedules.

The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Financial Measures for the three month ended March 31, 2021 and 2020(Unaudited data in millions, except per share amount) Three months Three months ended ended March 31, March 31, 2021 2020Adjusted Gross Margin GAAP Gross Profit (1) 122.8 113.9 Equity compensation 0.3 0.4 Other adjustments 0.6 - Adjusted Gross Profit $ 123.7 $ 114.3 Adjusted Gross Margin 71.5 % 69.7 %(1) Consists of total revenues less cost of molecular diagnostic testing andcost of pharmaceutical and clinical services from the condensed consolidatedstatements of operations. Three months Three months ended ended March 31, March 31, 2021 2020Adjusted Operating Expenses GAAP Operating Expenses (2) 169.5 247.6 Acquisition - amortization of intangible assets (15.2 ) (15.1 )Impairment of goodwill and intangibles - (98.4 )Equity compensation (8.5 ) (7.9 )Transformation initiatives (7.5 ) (2.8 )Other adjustments (11.3 ) 2.3 Adjusted Operating Expenses $ 127.0 $ 125.7 (2) Consists of research and development expense, change in the fair value ofcontingent consideration, selling, general, and administrative expense, andgoodwill and intangible asset impairment charges from the condensedconsolidated statements of operations. Three months Three monthsAdjusted Operating Loss ended ended March 31, March 31, 2021 2020Operating loss $ (46.7 ) $ (133.7 )Acquisition - amortization of intangible assets 15.2 15.1 Impairment of goodwill and intangibles - 98.4 Equity compensation 8.8 7.5 Transformation initiatives 7.5 2.8 Other adjustments 11.9 (2.3 )Adjusted operating loss $ (3.3 ) $ (12.2 ) Adjusted Net Loss Net loss $ (39.5 ) $ (115.2 )Acquisition - amortization of intangible assets 15.2 15.1 Impairment of goodwill and intangibles - 98.4 Equity compensation 8.8 7.5 Transformation initiatives 7.5 2.8 Other adjustments 11.9 (3.3 )Tax impact of non-GAAP adjustments (8.8 ) (11.6 )Adjusted net loss $ (4.9 ) $ (6.3 )Weighted average shares outstanding 76.0 74.5 Adjusted net loss per shares $ (0.06 ) $ (0.08 ) Three months Three months ended ended March 31, March 31, 2021 2020Cash flows from operations $ 71.8 $ 16.8 Capital expenditures (7.1 ) (3.0 )Free cash flow 64.7 13.8 Transformation initiative costs 7.1 2.8 Other adjustments 0.2 - Tax effect associated with non-GAAP adjustments (1.8 ) (0.8 )Adjusted Free cash flow $ 70.2 $ 15.8

Following is a description of the adjustments made to GAAP financial measures:

-- Acquisition amortization of intangible assets: Represents recurring amortization charges resulting from the acquisition of intangible assets, including developed technology and database rights. -- Impairment of goodwill and intangible: One-time impairment charges on intangible assets and goodwill tied to company acquisitions from prior years. -- Equity compensation non-cash equity-based compensation provided to Myriad employees. -- Transformation initiatives transitory costs such as consulting and professional fees related to Myriads Elevate 2020 program and transformation initiatives. -- Other adjustments Other one-time non-recurring expenses including expenses related to leadership transition, expenses related to non-recurring severance and retention agreements, non-recurring legal expenses and potential future consideration related to acquisitions from prior years.

Tax impact associated with non-GAAP adjustments Tax expense/(benefit) due to non-GAAP adjustments, differences between stock compensation recorded for book purposes as compared to the allowable tax deductions, and CARES Act legislation.

Media Jared Maxwell Investor Scott GleasonContact: Contact: (801) 505-5027 (801) 584-1143 jmaxwell@myriad.com sgleason@myriad.com