Myriad Genetics, Inc. (MYGN)

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Myriad Genetics Inc. (MYGN)

F2Q10 Earnings Call

February 2, 2010 4:30 p.m. ET


Peter Meldrum - President and Chief Executive Officer

Jim Evans - Chief Financial Officer

Greg Critchfield - President, Myriad Genetic Laboratories

Mark Capone - Chief Operating Officer


Ian Sanderson - Cowen

Geoff Meacham - J.P. Morgan

Amanda Murphy - William Blair

Charles Duncan - JMP Securities

Bill Quirk - Piper Jaffray

Ashim Anand - Natixis Bleichroeder

Lucy Lu - Citigroup


Ladies and gentlemen thank you for standing by. Welcome to the Myriad Genetics Second Fiscal Quarter Earnings Conference Call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator instructions)

As a reminder this conference is being recorded, February 3, 2010. I would now like to turn the conference over to Peter Meldrum, President and Chief Executive Officer. Please go ahead, sir.

Peter Meldrum

Thank you. Good afternoon. And welcome to the Myriad Genetics earnings call for our second fiscal quarter ended December 31, 2009. My name is Peter Meldrum and I’m Myriad’s President and CEO.

I am joined today by Jim Evans, our Chief Financial Officer; Gregory Critchfield, President of Myriad Genetic Laboratories; and Mark Capone, Chief Operating Officer of Myriad Genetic Laboratories; and our future President of Myriad Genetic Laboratories.

I’ll begin discussion this afternoon with a brief review of the past quarter and will be followed by Mr. Evans who will discuss our financial results. Dr. Critchfield and Mr. Capone will review the company’s molecular diagnostic business and sales and marketing initiatives. At the end of the presentation, I will turn the conference call back to the Operator for the question-and-answer period.

Please note that some of the information presented here today may contain projections or other 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/or adversely from those 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. The documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

Before we get into the financial results of the quarter, I’d like to spend a few minutes discussing a management change that was announced today. As mentioned in our news release, Dr. Gregory Critchfield will retire on March 1, 2010 to spend more time with his grandchildren and focus his energies on his many philanthropic pursuits.

I’ve had the pleasure of knowing and working with Greg for more than a decade and through the years I have developed great admiration for his keen intellect, medical expertise and genuine concern for the well being of patients with cancer.

Together we have worked towards the goal of commercializing products that assist physicians in improving the healthcare of their patients. Greg will be missed by all of us here at Myriad but I’m comforted by the fact that Mark Capone is eager to step into Greg’s shoes and carry on Myriad’s tradition of developing products that save lives and improve the quality of life for patients with cancer.

Mark has been with the company for more than seven years and has been responsible for the management of the company’s sales force and laboratory operations. Mark is eminently qualified for his expanded responsibilities having received an MS degree in management and an MS degree in chemical engineering from MIT.

He held management positions overseeing sales, production and development operations at Eli Lilly for 17 years prior to joining Myriad. We are all very excited to welcome Mark to his new role at Myriad.

Now, let me return to our results for the second fiscal quarter ending December 31, 2009. As I discussed on our last earnings conference call, we experienced a noticeable increase in weekly testing volumes during the latter part of September and throughout the month of October.

I’m pleased to report that this improved sample flow continued through November and December. As a result, revenues for our second fiscal quarter grew 11% to a record $92.8 million from the $84 million for the same period of the prior year.

We attribute this revenue growth to improve economic conditions and the increased sales and marketing initiatives that were implemented last August, particularly the company’s two direct-to-consumer marketing campaigns and the expansion of our OB/GYN speakers bureau.

These marketing programs are expected to continue to drive revenue growth during this third fiscal quarter. We also added 50 new sales reps to our OB/GYN sales force at the end of last summer. However, we are not anticipating significant productivity from these new hires until our fourth fiscal quarter.

In addition to these marketing programs, the company recently entered into a collaboration with Mammography Reporting System, which has enable us to expand our BRACAnalysis market into the women’s healthcare sector.

Given the early success of these sales and marketing programs, the increase in our testing volumes over the past quarter and our 9% sequential revenue growth, I remain confident that the company will meet or exceed the current first call consensus revenue of 381 million and earnings per share of $1.47 for fiscal 2010.

Our decision to invest in Myriad’s future by expanding our sales force and initiating the DTC marketing campaigns is paying off. Not only have we seen positive topline results from these initiatives but we were able to achieve this growth without hurting our bottom line.

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