On Sep 25, we issued an updated research report on leading molecular diagnostic services provider Myriad Genetics Inc. (MYGN).
The company reported better-than-expected fourth-quarter fiscal 2014 results with both revenues and adjusted earnings per share (EPS) exceeding the respective Zacks Consensus Estimate. Notably, Myriad's myRisk Hereditary Cancer test delivered impressive sequential growth of 89% in the fourth quarter, which even surpassed the company's anticipated growth rate.
Revenues increased 8.4% year over year to $188.8 million, beating the Zacks Consensus Estimate of $187 million. However, adjusted EPS of 48 cents, although ahead of the Zacks Consensus Estimate by 4.3%, declined 11.1% from the year-ago tally of 54 cents.
We are impressed with Myriad's outstanding performance in the international market, wherein it delivered robust revenue growth of 89% in the reported quarter. Management remains impressed with the progress Myriad is making in the international market and is bullish on raking in $50 million in international revenues by fiscal 2016.
The company's molecular diagnostic revenue growth in the fourth quarter included approximately $10.8 million from Myriad's recently completed Crescendo Biosciences acquisition. Based on the strong sample growth of Vectra DA in the fourth quarter, the company raised its revenue guidance for Crescendo to $65 million for fiscal 2015. The company also plans to invest vigorously in Crescendo's product pipeline of autoimmune and inflammatory disease test candidates.
Currently, the company is financing 13 Phase III clinical trials with flagship product BracAnalysis CDx in six different indicated patient populations. This provides Myriad a profitable opportunity to cater to a potential patient testing population of approximately 900,000 patients per year in the U.S.
During the quarter, the company witnessed beneficial outcomes from several clinical studies on major products like Vectra DA Score, Prolaris Score, myRisk, myPath and myPlan tests. Moreover, Myriad also plans to soon publish its health economic model that demonstrates substantial cost savings in testing all newly diagnosed prostate cancer patients with Prolaris. The data shows that Prolaris testing can deliver potential savings of over $800 million annually within the health care system, or more than $3,000 per patient.
Currently, Myriad remains committed to diversifying its revenue stream within new high-growth diagnostic markets and expanding its foothold in the international market, while preserving its leadership position in the hereditary cancer market. However, we remain on the sidelines to gauge the impact of the landmark Supreme Court ruling favoring market entry of other players to bolster competition, increase pricing pressure and apprehensive market conversion to myRisk test. At present, the stock carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some well-placed stocks from the Med-Biomed/Generic industry include Cambrex Corporation. (CBM), Gilead Sciences Inc. (GILD) and Heska Corporation (HSKA). All these stocks carry a Zacks Rank #1 (Strong Buy).
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