Myriad Genetics ($MYGN) may be furiously suing competitors who launched rival BRCA predictive cancer diagnostics. But the Utah company was strong enough to produce substantial gains in revenue in its fiscal 2014 second quarter, in part through the success of its own market-dominating BRCA offering. That, plus the planned acquisition of a rheumatoid arthritis test maker, is poised to ensure further gains down the line.
Myriad said it produced more than $204 million in revenue during its second quarter, a 37% hike over the fiscal 2013 second quarter. Net income, similarly, grew to $50.4 million, a gigantic 44% hike over the same period last year.
Much of those gains came from a big bump in sales for Myriad's BRACAnalysis test, which screens for mutations in the BRCA1 and BRCA2 genes to determine a patient's risk for breast or ovarian cancer. Revenue for the test hit the $141.2 million mark during the quarter, up 28% from the same period in 2013, and nearly 70% of Myriad's total revenue. Last summer, the U.S. Supreme Court issued a historic decision that invalidated some patents relating to the test but upheld others. Several competitors have jumped in, and Myriad promptly sued them for patent infringement. At least for now, the test still seems to have plenty of momentum behind it. Competition, plus a big drop in Medicare reimbursement rates, may challenge the test's revenue-generating potential in the months ahead, however.
Myriad said its BART test (for BRCA mutations not caught by the BRACAnalysis option) and the company's myRisk Hereditary Cancer test are among diagnostic offerings that also produced large revenue gains.
Myriad President and CEO Peter Meldrum has emphasized that the company is seeking to diversify its test offerings and expand its business internationally. The company took a big step in that direction on Feb. 4, disclosing that it will pay $270 million for Crescendo Bioscience, a California operation that has been commercializing a rheumatoid arthritis molecular diagnostic. The purchase price includes a $25 million investment Myriad made into the company last November. Crescendo will keep its name, become a wholly owned Myriad subsidiary and remain based in South San Francisco.
Myriad improved its fiscal year 2014 guidance based on its own organic growth and expected gains from the Crescendo acquisition. The company now predicts revenues for the fiscal year ending June 30, 2014, will hit between $740 million and $750 million, up from previous guidance of $700 million to $715 million. About $10 million of that will come from the Crescendo acquisition.
The company predicts its diluted earnings per share for fiscal 2014 will now reach $2.09 to $2.12, versus $1.92 to $1.97.
- read the earnings release
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