Myriad Genetics' third-quarter fiscal 2010 revenues increase 5% to $90.8M

May 5 2010

Myriad Genetics, Inc. (Nasdaq:MYGN) today reported financial results for the third fiscal quarter and the nine-month period ended March 31, 2010.

Third Fiscal Quarter Financial Results

Revenues rose 5% to $90.8 million for the three-month period ended March 31, 2010, from $86.5 million in the same three months of the prior fiscal year. While the Company's ongoing sales and marketing efforts in the quarter spurred growth, the Company noted that high unemployment and other economic challenges in the markets in which it operates continued to restrain sales in the quarter.

"While revenues for the quarter followed seasonal growth patterns, macroeconomic conditions continued to impact the frequency of physician visits, which remain well below historic levels," said Peter Meldrum, President and Chief Executive Officer of Myriad Genetics, Inc. "Amid this backdrop, we have been extremely active in refining and extending certain sales and marketing programs to drive growth. We believe these are the appropriate strategic actions to help drive further adoption and use of Myriad's growing product lineup."

Net income for the third quarter of fiscal 2010 rose 31% to $33.3 million, or $0.33 per diluted share, compared with $25.3 million, or $0.25 per diluted share, in the comparable period last year, which included a loss from discontinued operations of $12.9 million, or $0.13 per diluted share, related to the Company's former research and pharmaceutical businesses.

Research and development expense was $5.9 million for the three-month period ended March 31, 2010, compared with $4.5 million for the same period in the prior fiscal year. The 30% increase was primarily due to additional expenditures for clinical studies of the Company's currently marketed products, and research and development efforts on its internal product candidates.

Selling, general and administrative expense for the third quarter of fiscal 2010 was $40.8 million, compared with $35.5 million for the same quarter of the prior fiscal year, representing an increase of 15%. This increase was primarily attributable to costs associated with the expansion of the Company's sales force, direct-to-consumer marketing campaigns and physician speakers programs. The Company believes these investments are important for future revenue growth.

During the third quarter of fiscal 2010, days sales outstanding for Myriad's accounts receivable improved to 48 days compared with 49 days in the same period of the prior year. The Company believes that its accounts receivable are of high quality and its bad debt expense is a modest 4.9% of revenues.

Nine-Month Financial Results

For the first nine months of fiscal 2010, revenues increased 12% to $268.7 million from $240.4 million in the same period last year. Net income for the nine months ended March 31, 2010, was $99.1 million, or $1.00 per diluted share, compared with net income of $61.0 million, or $0.62 per diluted share, for the same period of the prior year, which included a loss from discontinued operations of $38.6 million, or $0.39 per diluted share. 

The Company continues to maintain a strong balance sheet, with $511.2 million in cash, cash equivalents and marketable investment securities at March 31, 2010, compared with $392.2 million at June 30, 2009. This 30% increase reflects the Company's strong cash generating capability, which contributed approximate $42 million during the third fiscal quarter. The Company has no debt, convertible securities, or other restrictions on its cash.

New Product Launch - PROLARIS^™

Myriad announced the launch of its eighth molecular diagnostic product, PROLARIS, during this third fiscal quarter. PROLARIS is a new prognostic medicine product that the Company believes provides valuable information to physicians to assess whether a patient diagnosed with prostate cancer is likely to have a slow growing cancer, which may be appropriate for a watchful waiting strategy, or a more aggressive cancer, requiring prostatectomy or radiation therapy. PROLARIS can also be used to estimate the risk of cancer recurrence in patients who have undergone a radical prostatectomy.

In a clinical study that analyzed material obtained through a transuretheral resection of the prostate in 365 prostate cancer patients, approximately 98% of prostate cancer patients with a low (favorable) PROLARIS score survived their disease after 10 years, compared to approximately 60% of the patients receiving a high (unfavorable) score who died of prostate cancer within 10 years. For the first time, PROLARIS provides clinicians with a direct molecular measure of a prostate tumor's capacity to divide and grow by examining genes that drive tumor growth at the molecular level.

"In discussion between our new urology sales force and physicians about the clinical value of PROLARIS, I am pleased to report that the reaction thus far has been very favorable," Meldrum said. "Through the remainder of fiscal 2010, and into the next fiscal year, we will be working toward capturing a share of the $270 million market for prostate cancer prognosis."

Fiscal Year 2010 Financial Outlook

In providing an outlook for revenue and earnings for the full fiscal year ending June 30, 2010, the Company expects revenue to be in the range of $360 million to $365 million, and earnings per diluted share to be in the range of $1.30 to $1.35. This guidance represents an approximate 11% revenue increase and a 54% earnings increase over the prior fiscal year.