Recently, Myriad Genetics (MYGN) announced a new $200 million share buyback program. The company has been rewarding its shareholders through share repurchases in the past. During fiscal 2011, Myriad repurchased 9.8 million shares for $200.5 million. The consistent share buyback program has lifted the company’s bottom line.
After completing the recent acquisition of Rules-Based Medicine for $80 million and $200.5 million of repurchase, the company exited the fiscal with $417.3 million of cash, cash equivalents, and marketable securities. With a strong balance sheet, Myriad is well placed to expand its product portfolio, targeting new territories and launching new products. Moreover, the existing cash balance breathes new life into the company’s plan to expand in Europe.
The European molecular diagnostics market size is about 75% of the US market. Moreover, many US based diagnostic companies derive 30%−50% of their overall revenue and profit from international operations. Based on these facts, Myriad is looking to have an European presence by early 2012. The company wants to begin by tapping opportunities in Germany, France, Italy, Spain and Switzerland.
Myriad is satisfied with its international expansion so far. The company is on track for equipping its laboratory in Munich and expects generating revenues in January 2012. Myriad is also working with distributors to expand into Latin America and Asia.
During the last reported quarter, Myriad reported $107.4 million in revenues, up 14% compared with the year-ago quarter. The company’s two businesses – Molecular diagnostic testing and Companion diagnostic services recorded revenues of $105.4 million (up 12.2% year over year) and $2 million, respectively.
The company acquired the Companion diagnostic business following the acquisition of Rules-Based Medicine in May 2011. Molecular diagnostic testing revenue is derived from both Oncology (up 11% to $74.7 million) and Women’s Health (up 15% to $30.6 million).
We consider Myriad’s Bracanalysis as a valuable asset for top line growth as it has the potential to tap a widely unexplored market. Although the company’s molecular diagnostics business is performing well, any hiccup in the economic recovery could have a negative impact on patient sample volume. Moreover, the company faces competition from players like Qiagen (QGEN) and Laboratory Corporation of America Holdings (LH).
LABORATORY CP (LH): Free Stock Analysis Report
MYRIAD GENETICS (MYGN): Free Stock Analysis Report
QIAGEN NV (QGEN): Free Stock Analysis Report
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