Myriad reported a mixed fourth-quarter fiscal 2014, with earnings
per share of $0.48, registering a 4.3% beat over the Zacks
Consensus Estimate. However, it deteriorated from the
year-over-year adjusted number. On the other hand, revenues jumped
8.4% to $188.8 million, topping the Zacks Consensus Estimate of
$187 million. According to management, the company is perfectly in
sync with the strategic initiatives of expanding in the core
hereditary cancer market, growing its international business and
launching new life-saving products. The positive results from the
different studies related to Myriad's diverse products were yet
another upside. We look forward to Myriad's efforts to revamp its
portfolio with the myRisk test. The company should gain from
expansion of indications, and stronger international presence.
However, the market entry of other players following a Supreme
Court ruling and subsequent price-war is a cause of concern.
Uncertainty owing to the conversion to myRisk is another headwind.
We are thus Neutral on the stock.
Myriad Genetics (MYGN), headquartered in Salt Lake City, UT,
employs a number of proprietary technologies to target the genetic
basis of human diseases and the role these genes might play in the
onset, progression and treatment of the respective diseases. This
information helps in developing molecular diagnostic products
designed to assess an individual's risk for developing a disease
later in life (predictive medicine), identification of a patient's
probability of responding to drug therapy and guidance regarding
proper dosage to ensure optimal treatment (personalized medicine),
or assessment of a patient's risk of disease progression and
recurrence (prognostic medicine). To date, Myriad has launched nine
commercial molecular diagnostic products, including five predictive
medicine, three personalized medicine and one prognostic medicine
Myriad has decided on some strategic options for long-term
revenue growth. These include growing existing products and
markets, developing an international presence, investing in new
products and making the most of the companion diagnostic
opportunity. In 2011, Myriad acquired molecular diagnostic company
Rules-Based Medicine (RBM) to expand its product pipeline to cover
other diseases, including neuroscience disorders, infectious
diseases and inflammatory diseases. In 2011, the company also
acquired in-licensed technologies from Chronix Biomedical and
In Feb 2014, Myriad acquired Crescendo Bioscience an autoimmune
diagnostics company. The acquisition will allow the company to
expand its portfolio of diagnostic tests beyond breast cancer and
enter the autoimmune diagnostic market.
Consequently, the company's current focus on Oncology,
Preventative Care, Urology, Dermatology, and Neuroscience will also
include Rheumatology as the sixth specialty disease. Vectra DA,
Crescendo's first product, is the only blood-based molecular
diagnostic test to determine the level of disease activity in
patients with rheumatoid arthritis. The product is able to assess
progression of the disease (post diagnosis) helping physicians to
take the correct decision.
BracAnalysis is Myriad's flagship product, contributed 69% of
total revenues in the third quarter of fiscal 2014. This test
provides a comprehensive analysis of BRCA1 and BRCA2 genes to
assess a woman's risk of hereditary breast and ovarian cancers. A
woman testing positive for a deleterious mutation with the
BracAnalysis test has an 82% risk of developing breast cancer and a
44% risk of developing ovarian cancer during her lifetime. The
average selling price (ASP) of BracAnalysis test is $3,100. The
company derives revenue from sales of Molecular diagnostic tests
(95% of total revenue) and Companion diagnostic services (5% of
On Sep 5, 2013, Myriad had launched its major pipeline product
myRisk Hereditary Cancer. Myriad announced the average selling
price of myRisk Hereditary Cancer test in the range of $3,700. The
product has an estimated gross margin of about 87%.
In Dec 2013, in order to boost acceptance of the novel test,
Myriad demonstrated positive clinical validity data on myRisk
Hereditary Cancer diagnostic test at the 2013 San Antonio Breast
Cancer Symposium. The clinical data demonstrates the superiority of
this diagnostic test over other testing modes. It was found that
myRisk has the ability to identify 51% more patients with higher
risk of hereditary breast and ovarian cancer than testing of BRCA1
and BRCA2 genes alone.
On Oct 29 2013, Myriad launched its myPlan Lung Cancer, a gene
expression test designed to assist a physician in predicting the
aggressiveness of a patient's lung cancer catering to leading
oncologists throughout the U.S. Data presented at the International
Association for the Study of Lung Cancer showed that patients with
high-risk myPlan Lung Cancer scores resulted in approximately twice
the number of lung-cancer deaths over a five-year period, compared
to patients with a low-risk score.
On Nov 12, 2013, Myriad launched its molecular diagnostic test
myPath Melanoma. This marked Myriad's foray into the area of
dermatology through efficient detection of malignancy in skin
biopsy. As per the findings which were recently published at the
American Society of Dermatopathology, myPath Melanoma provides 90%
accuracy in distinguishing malignant melanoma from benign pigmented
skin lesions in a variety of subtypes.
Analyst/Investor Day Developments: On May 9, 2013, Myriad
revealed that its myRisk Hereditary Cancer test encompasses 25 gene
panel (including sequencing and large rearrangements). At first,
the company will target breast cancer, colon cancer, ovarian
cancer, endometrial cancer, pancreatic cancer and melanoma.
As a result, Myriad seeks to discontinue its flagship
BracAnalysis, Colaris, Colaris AP, Melaris and Panexia once it
transforms the entire hereditary cancer market by summer 2015.
Later, the company plans to extend the test application to lung,
prostate and other types of cancer. According to management, the
turnaround time for the novel test will be at most 14 days.
The following chart depicts market opportunity of myRisk
Hereditary Cancer Test: First Comprehensive Pan-Cancer Panel
Other products in Myriad's current portfolio consists of:
Colorectal or uterine cancer
Hereditary colorectal cancer
Genetic susceptibility to malignant melanoma
Analyzes mutations in the DPYD gene and variations in the TYMS
gene to assess patient risk of 5-FU (flourouracil) toxicity
Personalized medicine product for colon cancer
Personalized and prognostic medicine product analyzing the PTEN
gene and assessing loss of PTEN function in many cancer types
Assesses the form of prostate cancer to determine its nature
Hereditary pancreatic and related cancer
Myriad Genetics, Inc. (MYGN): Read the Full
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