Myriad Genetics, Inc. (MYGN)

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Myriad Genetics (MYGN)

Q4 2013 Earnings Call

August 13, 2013 4:30 pm ET


Scott Gleason

Peter D. Meldrum - Chief Executive Officer, President and Director

Mark Christopher Capone - President of Myriad Genetic Laboratories Inc

James S. Evans - Chief Financial Officer, Principal Accounting Officer and Treasurer


Amanda Murphy - William Blair & Company L.L.C., Research Division

William R. Quirk - Piper Jaffray Companies, Research Division

Charmaine Chan - RBC Capital Markets, LLC, Research Division

Daniel L. Leonard - Leerink Swann LLC, Research Division

Sung Ji Nam - Cantor Fitzgerald & Co., Research Division

Derik De Bruin - BofA Merrill Lynch, Research Division

Andrew L. Jones - Stephens Inc., Research Division

Peter Lawson - Mizuho Securities USA Inc., Research Division

Douglas Schenkel - Cowen and Company, LLC, Research Division

Isaac Ro - Goldman Sachs Group Inc., Research Division



Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics Fourth Quarter and Year End 2013 Financial Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, August 13, 2013.

I would now like to turn the conference over to Mr. Scott Gleason. Please go ahead, sir.

Scott Gleason

Thank you. Good afternoon, everyone, and welcome to the Myriad Genetics fourth quarter fiscal year 2013 earnings call. My name is Scott Gleason, VP of Investor Relations here at Myriad Genetics. And during the call, we will review the financial results we've released today. After which, we will host a question-and-answer session. If you have not had a chance to review the earnings release, it can be found on the Investors section of our website at Presenting for Myriad today will be Pete Meldrum, President and Chief Executive Officer; Mark Capone, President Myriad Genetics Laboratories; and Jim Evans, our Chief Financial Officer. This call can be heard live via webcast at The call is being recorded and will be archived in the Investor Section of our website. We would encourage listeners on today's call to follow along with our prepared slides, which can be found under the Investors Section of our website at

Please note that some of the information presented here today may contain projections or rather forward-looking statements regarding future events or the future financial performance of the company. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K. These documents identify important risk factors that would cause the actual results to differ materially from those contained in our projections or forward-looking statements.

With that, I'd like now to turn the call over to Pete.

Peter D. Meldrum

Thank you, Scott. I'm pleased to report that Myriad delivered another strong quarter to top off what was an outstanding year for the company. Year-over-year revenue growth in the fourth quarter exceeded 30%, and represented the eighth consecutive quarter where top line growth has exceeded 20%. This outstanding performance is a testament to the dedication of our employees and I'm proud of the entire Myriad team.

Again, our Women's Health business, which benefited from our protocol integration strategy, our social media targeting efforts and from recent celebrity publicity around breast cancer was a standout segment in the quarter with year-over-year growth of 51%.

Our Oncology business increased 19% compared to the prior year period, generating strong double-digit growth and building upon trends we saw at the end of the third fiscal quarter. This strong revenue growth is a testament to the focus of our Oncology team and the utilization of our new targeted selling strategy.

Earnings per share in the fourth quarter were $0.53, up 58% year-over-year. We are very pleased with the performance of the company and we are actively pursuing several strategies to continue to grow our business and enhance shareholder value. These strategies include expanding our core markets through our new myRisk Hereditary Cancer and myPlan Lung Cancer test. Entering new sales channels such as dermatology and pathology with our new myPath Melanoma test. And building our international business as we transition into a company with true global reach.

With that in mind, I'm pleased to provide a first look at our fiscal 2014 financial guidance. We considered several factors before preparing our 2014 guidance. While the company received a benefit from the recent celebrity publicity around breast cancer, the duration of this publicity benefit is likely to be short term. Consequently, for the purpose of our guidance, we are assuming this tailwind will wane quickly. Additionally, we've taken into consideration the recent emergence of competition into our core markets. Based upon these 2 assumptions, we are forecasting total revenue of $690 million to $710 million in fiscal 2014, which represents a 13% to 16% revenue growth compared to the 2013 fiscal year. This is in line with the previous guidance at our Analyst Day where we projected low to mid double-digit top line growth.

Moving on to our earnings per share guidance. We had a 37% corporate tax rate in fiscal 2013, but believe we will return to the more normal 40% tax rate in fiscal 2014. We also anticipate that our legal expenses will be substantially higher in fiscal 2014 due to the recent patent infringement litigations. Therefore, we are assuming added legal spending of approximately $10 million or approximately $0.07 per share after tax.

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