Myriad Genetics, Inc. (MYGN) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $206 million, which decreased 4% year-over-year. Excluding headwinds like UnitedHealthcare's decision on GeneSight and the divested European EndoPredict business, the business was stable compared to Q3 2024. Factoring in these headwinds and prior period changes, year-over-year growth was 5%.
Testing Volume MyRisk in oncology grew 16% year-over-year, and MyRisk for unaffected grew 11% year-over-year. GeneSight volume grew 8% year-over-year, and Prolaris test volume grew modestly year-over-year. Legacy prenatal products, Prequel and Foresight, were flat year-over-year but showed improvement from Q2.
Adjusted Gross Margin 70.1% in the third quarter, reflecting strong operational efficiencies and favorable test mix.
Adjusted EBITDA $10.3 million, reflecting strong operational leverage and cost management.
Oncology Revenue $81.8 million, a decline of 1% year-over-year. MyRisk test volume grew 16% in the affected market and 11% in the unaffected market.
Women's Health Revenue $85.2 million, an increase of 3% year-over-year. Hereditary cancer testing revenue grew 4%, and volume grew 11% year-over-year.
Mental Health Revenue (GeneSight) $38.7 million, with volume growth of 8% year-over-year. Revenue was impacted by UnitedHealthcare's coverage policy change in January 2025.
Consolidated Financial Results Revenue of $205.7 million, a decline of 4% year-over-year. Test volumes increased 3%, but average revenue per test decreased 7% due to factors like payer mix shifts and UnitedHealthcare's policy change.
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Operating Highlights
MyRisk test: Continued strong volume growth in oncology at 16% year-over-year and 11% growth for unaffected markets. Updated MyRisk test to launch in November 2025, expected to support growth in 2026 and beyond.
GeneSight test: Volume grew 8% year-over-year, with focus on medium and higher volume accounts. Revenue impacted by UnitedHealthcare's policy change, but positive coverage policies secured in 9 states.
Prolaris test: Stable demand with modest year-over-year growth. AI-enabled Prolaris test to launch in the first half of 2026.
FirstGene prenatal screen: Early access commenced in June 2025, with commercial launch expected in 2026. Potential to expand the prenatal testing market.
Precise MRD test: Ultrasensitive tumor-informed test to launch for clinical use in the first half of 2026, starting with Stage II and III breast cancer.
Cancer care continuum: Focus on expanding hereditary cancer tests and introducing new cancer screening, diagnostic, and monitoring tests. Collaboration with SOPHiA GENETICS for biomarker validation and CDx development services.
Prenatal health: Growth expected through new products like FirstGene and improved commercial execution.
Mental health: Revenue growth for GeneSight test by targeting high-value accounts and leveraging state biomarker laws.
Gross margin: Strong adjusted gross margin of 70.1% in Q3 2025, reflecting operational efficiencies.
Adjusted EBITDA: Reported $10.3 million in Q3 2025, demonstrating profitability.
Organizational redesign: Streamlined structure to reduce management layers, reallocate resources to cancer care continuum, and improve customer experience.
Strategic pillars: Focus on cancer care continuum, prenatal health, and mental health for accelerated growth. Emphasis on partnerships, team expertise, and execution excellence.
Commercial investments: $35 million multiyear program to expand commercial capabilities, enhance tools, and fund strategic R&D programs.
Partnerships: Collaboration with SOPHiA GENETICS and PATHOMIQ to enhance product offerings and market reach.
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Risk or Challenges
Revenue Decline: The company reported a 4% year-over-year decline in revenue for Q3 2025, attributed to factors such as UnitedHealthcare's policy change on GeneSight, the divestiture of the European EndoPredict business, and a prior period contribution that did not repeat.
UnitedHealthcare Policy Change: The policy change by UnitedHealthcare regarding GeneSight coverage has negatively impacted revenue, with a $7 million net impact in Q3 2024 and ongoing challenges in 2025.
Payer Mix Shifts: Modest shifts in payer mix within the hereditary cancer portfolio had a larger-than-expected negative impact on average revenue per test in Q3 2025.
Operational Efficiency Challenges: The company is undergoing organizational redesign and efficiency actions, including reducing management layers and reallocating resources, which may pose risks during the transition period.
Regulatory and Reimbursement Risks: The company faces uncertainties in securing reimbursement for its tests, including GeneSight, which is impacted by state biomarker laws and payer policies.
Market Competition: The company operates in a highly competitive market, particularly in hereditary cancer testing and mental health diagnostics, which could impact market share and pricing.
Economic and Market Conditions: Economic uncertainties and market conditions could affect customer demand and payer reimbursement rates, impacting overall revenue.
Supply Chain and Operational Risks: Potential disruptions in supply chain or operational inefficiencies could impact the timely delivery of tests and services.
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Guidance & Outlook
Revenue Growth: The company reaffirmed its full-year 2025 financial guidance, projecting revenue in the range of $818 million to $828 million. This includes a gross margin range of 69.5% to 70% and adjusted EBITDA guidance of $27 million to $33 million.
Cancer Care Continuum Strategy: The company plans to launch an updated MyRisk test in November 2025, which is expected to drive strong growth in 2026 and beyond. Additionally, the company is on track to launch its Precise MRD test for clinical use in the first half of 2026, targeting Stage II and Stage III breast cancer in the neoadjuvant setting. A new AI-enabled Prolaris prostate cancer test is also set for launch in the first half of 2026.
Strategic Partnerships: The company has entered into a collaboration with SOPHiA GENETICS to provide biomarker validation and CDx development services. Additional strategic partnerships are expected to be announced in the coming months.
Prenatal Testing: The FirstGene multiple prenatal screening test is expected to launch commercially in 2026, with the potential to expand the prenatal testing market.
Mental Health Testing: The company aims to grow revenue for its GeneSight test by focusing on high-value accounts, leveraging state biomarker laws, and optimizing revenue cycle workflows. The company is also working with UnitedHealthcare to address coverage policy changes.
Operational Efficiency: The company is implementing an organizational redesign to improve customer experience, gain market share, and reduce operating expenses as a percentage of revenue. This includes reallocating headcount and funding to support growth in the cancer care continuum.
Commercial Investments: A multiyear program to invest over $35 million in strengthening commercial capabilities, focusing on the cancer care continuum, is planned. This includes expanding the commercial team, enhancing commercial tools, and increasing funding for strategic R&D programs.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are the offsets and savings being managed as the company invests in growth towards 2026, and how does this impact adjusted EBITDA?
A:The company is committed to profitable growth by focusing on the cancer care continuum. Actions include organizational redesign, removing management layers, reallocating investments, and expanding the sales footprint. The goal is to grow revenue faster than operating expenses, maintaining profitability.
Q:Why did the NIPT side come in softer than expected, and is there any market share loss?
A:The softness was due to operational execution challenges in Q2, which have been addressed. The company is on track to regain growth, supported by new products like Prequel, Foresight, F8, and FXN. While competitors are entering the market, the company is optimistic about accelerating growth with FirstGene.
Q:What is causing friction in the new ordering management system for the NIPT business, and how will single-gene NIPT contribute to growth?
A:The friction is due to regaining high-volume customers who shifted away during operational challenges. The company is improving and expects volume growth in coming quarters. Single-gene NIPT, combined with expanded carrier screening in FirstGene, is expected to expand the market and accelerate growth.
Q:What is the revenue opportunity growth from an ASP perspective in the coming years for NIPT?
A:The company is excited about including RHD in the FirstGene offering and anticipates payer adoption of expanded carrier screening. However, reimbursement for innovations like FirstGene may take time, and the company is not relying on quick changes in the reimbursement market.
Q:What drove the 11% year-over-year volume growth in the hereditary cancer side of the business, and are there market dynamics accelerating growth?
A:The growth is attributed to improvements in customer workflow, EMR integration, and new programs like the breast cancer risk assessment. The hereditary cancer market remains underpenetrated, offering significant growth opportunities.
Q:What is the focus of recent partnerships like PATHOMIQ and SOPHiA, and are there plans for more partnerships?
A:The focus is on the cancer care continuum. PATHOMIQ combines molecular tests with AI for prostate cancer, while SOPHiA offers liquid biopsy for therapy selection. Future partnerships may target high-growth areas like IO therapy response monitoring and MRD.
Q:What are the biggest mix and ASP effects impacting hereditary cancer revenue, and how will this evolve with the expanded MyRisk panel?
A:ASP was impacted by payer mix and lumpiness in biopharma revenue. The expanded MyRisk panel, launching this month, is expected to support growth by including all high-risk genes recommended by NCCN and ASCO guidelines.
Q:What are the KPIs for the cancer care continuum strategy in 2026?
A:KPIs include volume and revenue growth, expansion of the provider base, and increased use of multiple products by providers. The company will share more details at JPMorgan.
Q:What is the current turnaround time for Prequel results, and how does it compare to competitors?
A:The turnaround time is competitive and industry standard. The 8-week blood draw for Prequel aligns with patient convenience and workflow, which is valued by providers.
Q:Will FirstGene have a similar turnaround time to Prequel, and will it move to an 8-week blood draw?
A:Yes, FirstGene is expected to have a similar turnaround time and will move to an 8-week blood draw upon full commercial launch.
Q:What is the ASP assumption for GeneSight in 2026, and how does reimbursement impact this?
A:The company expects continued payer support for GeneSight ASP, driven by new medical policies and biomarker laws. However, no specific guidance for 2026 was provided.
Q:Are there plans to lower OpEx beyond reallocating R&D resources?
A:Yes, the company is reallocating savings from organizational changes to add sales positions and support new product launches like MRD and PATHOMIQ Prolaris.
Q:What is the cadence of clinical data releases for the PATHOMIQ Prolaris combination test?
A:The first combined test will launch in the first half of 2026, with a follow-on offering planned for 2027 to address additional prostate cancer segments.
Q:How much of the 2025 ASP benefit comes from operational factors versus new coverage wins?
A:The company continues to focus on reducing no-pay rates and optimizing revenue cycle management. No specific quantification was provided, but improvements are expected to contribute to ASP benefits over several years.
Q:What is driving the acceleration in MyRisk volume growth, and how will the expanded panel impact this?
A:The acceleration is driven by workflow improvements, EMR integration, and new programs like breast cancer risk assessment. The expanded MyRisk panel, launching this month, is expected to further support growth.
Q:Is GeneSight becoming less of a priority within the commercial organization?
A:No, GeneSight remains an important part of the portfolio. The company continues to focus on commercial and payer market efforts to drive growth, despite the UnitedHealth coverage impact.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance for 2026 ASP assumptions for GeneSight and did not quantify the impact of operational factors versus new coverage wins on the 2025 ASP benefit. Additionally, they used vague language when discussing the timeline for reimbursement changes for innovations like FirstGene.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CFO Wheeler
MRD test
MyRisk RiskScore
Precise MRD
SOPHiA GENETICS
Stage
abstract
action
addition
application
capital deployment
cash flow
change estimate
collaboration SOPHiA
companion
development team
discipline
funding
headwind test
industry
month
period change
pillar
portfolio cancer
portfolio volume
redesign
slide update
state
survival rate
test breast
test use
test value
trend
tumor Precise
volume market
volume testing
MYGN Transcript
Myriad Genetics, Inc. (MYGN) Presents at 44th Annual J.P. Morgan Healthcare Conference Transcript
Neutral1-14
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
Unknown8-6
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.
MYGN Slides
MYGN Report
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