Myriad Genetics, Inc. (MYGN) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call presents a mixed picture. Financial performance shows improvement, with increased adjusted gross margin and EBITDA. However, the lowered revenue guidance and unresolved issues like SneakPeek and unclear management responses create uncertainties. The strategic focus on oncology and partnerships is promising but lacks immediate impact. Overall, the sentiment is neutral with potential for future growth, but current uncertainties and guidance adjustments balance out the positives.

Key Financial Performance

Revenue $213 million, representing an increase of 5% year-over-year when excluding UnitedHealthcare's decision on GeneSight and the divested European EndoPredict business. Growth attributed to improved average revenue per test and execution of pricing improvement operational plans.

Average Revenue Per Test Increased by 2% year-over-year, driven by test mix, sales targeting, revenue cycle projects, and expanding payer coverage.

Testing Volume for MyRisk HCT in Oncology Increased by 14% year-over-year, attributed to addressing customer workflow challenges, including EMR functionality.

GeneSight Volume Increased by 5% year-over-year, recovering from low single digits due to organizational stabilization after cost-saving actions in Q1.

Prolaris Volume Slightly down year-over-year against a strong Q2 2024 comparison but up 6% sequentially over Q1 2025.

Legacy Prenatal Products (Prequel and Foresight) Volume Declined by 7% year-over-year due to challenges with implementing an order management system, which has since been resolved.

Adjusted Gross Margin 71.5% in Q2, an increase of 140 basis points year-over-year, driven by favorable test mix, expanding payer coverage, and lab efficiencies.

Adjusted EBITDA $14.5 million, representing a 24% growth year-over-year, attributed to strong gross profit base and cost management.

Adjusted EPS $0.05 for Q2, reflecting improved profitability.

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Operating Highlights

Expanded MyRisk panel: Upcoming launch to enhance hereditary cancer testing.

FirstGene multiple prenatal screen: Early access launch in June with full commercial launch planned for 2026.

Precise MRD test: Early access launch planned for the first half of 2026.

Cancer Care Continuum (CCC): Focus on cancer diagnostics due to a sizable and growing market with good reimbursement.

Prenatal health: Leveraging recently launched tests like Prequel NIPS and expanded Foresight carrier screen panel.

Mental health: Focus on GeneSight test with expanded payer coverage and leveraging state biomarker laws.

Revenue growth: Generated $213 million in Q2 2025, a 5% year-over-year increase excluding certain impacts.

Gross margin improvement: Achieved 71.5% adjusted gross margin, up 140 basis points year-over-year.

Operational efficiencies: Fixed prenatal ordering system issues and improved EMR functionality for hereditary cancer testing.

Cancer Care Continuum strategy: Updated strategy to focus on cancer diagnostics with three strategic pillars: growth acceleration, prenatal and mental health revenue growth, and sustained profitability.

Strategic partnerships: Collaboration with PATHOMIQ for prostate cancer tests and plans for more partnerships.

Financial discipline: Secured $200 million term loan to support growth and maintain financial discipline.

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Risk or Challenges

UnitedHealthcare's decision on GeneSight coverage: The decision by UnitedHealthcare to change its coverage policy for GeneSight has negatively impacted revenue, with a decline of $7.1 million year-over-year. This poses a significant challenge to the company's pharmacogenomics business.

Prenatal order management system issues: Challenges with implementing a new order management system for prenatal products caused a temporary decline in test volumes, impacting revenue growth in this segment.

Decline in Prolaris volume: Prolaris test volumes have been relatively consistent but are not meeting expectations. The company is facing challenges in regaining market share and driving growth in this segment.

Goodwill and intangible asset impairment: A noncash impairment charge of $317 million was recognized due to a significant and prolonged decline in market capitalization, which could impact investor confidence and financial stability.

Interest rate on new term loan: The new $200 million term loan from OrbiMed has a high interest rate of approximately 11% for the initial tranche, which could increase financial costs and pressure profitability.

Volume decline in legacy prenatal products: Volume for legacy prenatal products, Prequel and Foresight, declined 7% year-over-year, which could hinder growth in the Women's Health segment.

Competitive pressures in cancer diagnostics: The company faces competition in high-growth cancer diagnostic segments, which could impact its ability to build meaningful revenue streams despite its established reputation.

Dependence on payer coverage expansion: The company's growth strategy heavily relies on expanding payer coverage for its tests. Any delays or setbacks in securing coverage could adversely affect revenue.

Operational execution risks: The company acknowledges the need for improved execution rigor and urgency to address challenges and capitalize on growth opportunities, indicating potential risks in strategic execution.

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Guidance & Outlook

Revenue Guidance for 2025: The company has raised its full-year revenue guidance to a range of $818 million to $828 million, reflecting positive Q2 revenue performance.

Gross Margin Guidance for 2025: Gross margin is expected to be between 69.5% and 70%, an increase from previous guidance.

Adjusted Operating Expenses for 2025: Adjusted operating expenses are projected to range between $562 million and $568 million.

Adjusted EBITDA for 2025: The company has raised its adjusted EBITDA guidance to a range of $27 million to $33 million.

Adjusted EPS for 2025: Adjusted EPS is expected to range between a loss of $0.02 and a gain of $0.02, reflecting incremental interest expense from new financing.

Prenatal Test Volume Growth: Prenatal test volume is expected to accelerate in the second half of 2025 following the resolution of order management system issues.

GeneSight Volume Growth: GeneSight volume growth is projected to continue in the mid-single digits, supported by payer coverage expansions and targeted account focus.

Hereditary Cancer Testing (HCT) Growth: HCT volume growth is expected to continue, driven by EMR integration improvements and the breast cancer risk assessment program.

Prolaris Volume Growth: Prolaris volume is anticipated to grow, supported by investments in the commercial channel and new strategic partnerships.

Cancer Care Continuum (CCC) Strategy: The company plans to focus on the Cancer Care Continuum to drive accelerated growth and profitability, including expanding its testing portfolio and leveraging strategic partnerships.

Prenatal Health and Mental Health Revenue Growth: Prenatal health and mental health revenues are expected to grow at or above market rates, supported by new product launches and payer coverage expansions.

Ultrasensitive Precise MRD Test Launch: The company plans an early access launch of its ultrasensitive Precise MRD test in the first half of 2026.

FirstGene Multiple Prenatal Screen Launch: A full commercial launch of the FirstGene multiple prenatal screen is planned for 2026.

Strategic Partnerships: The company expects to announce more strategic partnerships in the coming quarters to support growth in cancer diagnostics.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Is the intent of this update today to demonstrate progress and indicate that KPIs are coming soon?

A:Yes, the intent was to share the progress of the strategic review, clarify the pillars, and indicate that KPIs and more specific details will be shared in the upcoming months, possibly at JPMorgan.

Q:Should we believe there are no divestitures coming and that you are happy with the portfolio and pipeline as currently built?

A:The company is excited about the strategy and will periodically review all product lines, including GeneSight, to ensure alignment with strategic goals.

Q:What is the biggest change relative to previous administrations?

A:The biggest changes include focusing on high-growth market segments, expanding beyond hereditary cancer testing into other applications, forming partnerships, increasing urgency, rigor, and discipline in execution, and adding the right team with domain expertise.

Q:What has been submitted to United for GeneSight, and what are the expectations for resolution?

A:Three publications have been submitted to United for review in the fall, including an economic utility study, a meta-analysis, and a sub-analysis. United is expected to review these in November-December, with any policy changes effective in early 2026.

Q:Has the timing of the MRD launch moved, and what remains to be done before the early access phase?

A:Yes, the timing has shifted to an early access launch in the first half of 2026. Clinical studies are ongoing, and MolDX submission is expected in Q1 2026, with approval likely by year-end. Early access will focus on a limited number of providers.

Q:What are the growth expectations for the portfolio, and how should we think about the different segments?

A:The company expects high single-digit to low double-digit growth over five years. Prenatal health and mental health are expected to grow at or above market rates, while oncology is expected to grow in the high single digits to low double digits, driven by hereditary cancer testing and new areas like MRD and comprehensive genomic profiling.

Q:How has traction for the Prequel test been since its launch, and has it gained market share?

A:The Prequel test has seen good uptake due to its 8-week gestation age approach, fitting well into workflows. However, it has been challenging to quantify market share gains.

Q:What was the impact of the order management system issue on prenatal volumes, and has it been resolved?

A:The issue caused prenatal volumes to decline by about 4% year-to-date. The problem has been resolved, and the company expects growth in the back half of the year.

Q:What is the oncology strategy, and how does the company plan to compete in the market?

A:The strategy includes leveraging trust and access from hereditary cancer leadership, providing unified reports for easier interpretation, and focusing on differentiated tests like MRD. Partnerships will also play a role in entering new oncology segments.

Q:What is the status of SneakPeek, and has it started funneling patients to Prequel?

A:SneakPeek has been challenging to optimize and has not yet significantly funneled patients to Prequel. The company plans to revisit its strategy for this product.

Q:What is the company's approach to R&D investment for oncology?

A:The company plans to increase R&D investment in oncology while managing overall expenses to grow revenue faster than operating expenses. Partnerships will also help achieve objectives cost-effectively.

Q:What is the update on Precise Liquid, and how will the company address the liquid biopsy market?

A:The company has decided not to launch Precise Liquid based on acquired assets. Instead, it plans to serve the liquid biopsy market through partnerships.

Q:Review of Unclear Management Responses

A:Management avoided providing specific KPIs or quantifiable details during the call, stating that these would be shared in the upcoming months. They also did not provide clear financial targets or specifics on the growth rates for individual segments, leaving some questions about the long-term revenue plan unanswered.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

MYGN Transcript

Myriad Genetics, Inc. (MYGN) Q3 2025 Earnings Call Transcript

Positive11-3

The earnings call reveals strong performance with raised revenue and EBITDA guidance, new product launches, and strategic partnerships. Despite some operational challenges, management's optimistic outlook, particularly in prenatal and cancer diagnostics, suggests potential growth. The Q&A highlights market expansion and improved customer workflows, reinforcing positive sentiment. However, unclear responses on ASP assumptions and reimbursement timelines introduce some uncertainty, slightly tempering the overall positive outlook.

Myriad Genetics, Inc. (MYGN) Presents At Morgan Stanley 23rd Annual Global Healthcare Conference Transcript

Neutral9-10

Myriad Genetics, Inc. (MYGN) Q2 2025 Earnings Call Transcript

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Myriad Genetics, Inc. (MYGN) Q1 2025 Earnings Call Transcript

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The earnings call reveals several negative factors: a 3% revenue decline, a significant impact from UnitedHealthcare's policy change on GeneSight, and cash burn issues. Despite some positives like prenatal revenue growth and increased gross margins, the lack of a share repurchase program and unclear management responses in the Q&A section further contribute to uncertainty. The market cap of approximately $2.2 billion suggests moderate sensitivity to these issues, leading to an overall negative sentiment.

MYGN Slides

Myriad Genetics Q1 2025 slides: Revenue declines 3% as company slashes guidance

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Myriad Genetics Q2 2025 slides: revenue growth accelerates, guidance raised

2025-08-05

Myriad Genetics Q3 2025 slides: volume growth offsets revenue decline, CCC strategy advances

2025-11-03

MYGN Report

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