Form 8-K MYRIAD GENETICS INC For: Feb 07
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2017
MYRIAD GENETICS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 0-26642 | 87-0494517 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
320 Wakara Way
Salt Lake City, Utah 84108
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (801) 584-3600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02 | Results of Operations and Financial Condition. |
On February 7, 2017, Myriad Genetics, Inc. (“Myriad”) announced its financial results for the three months ended December 31, 2016. The earnings release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
| ITEM 7.01 | Regulation FD Disclosure. |
On its earnings conference call for the three months ended December 31, 2016, Myriad also delivered a slide presentation, which is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference. [The slide presentation will also be available under the “Investors –Events & Presentations” section of Myriad’s website at www.myriad.com.]
FORWARD-LOOKING STATEMENTS
Exhibits 99.1 and 99.2 contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our business, goals, strategy and financial and operational outlook. These “forward-looking statements” are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that sales and profit margins of our existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to our ability to transition from our existing product portfolio to our new tests; risks related to changes in the governmental or private insurers reimbursement levels for our tests or our ability to obtain reimbursement for our new tests at comparable levels to our existing tests; risks related to increased competition and the development of new competing tests and services; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and pharmaceutical and clinical services, including our ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying our molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating our laboratory testing facilities; risks related to public concern over our genetic testing in general or our tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to our ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to our ability to successfully integrate and derive benefits from any technologies or businesses that we license or acquire; risks related to our projections about the potential market opportunity for our products; the risk that we or our licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying our tests; the risk of patent-infringement claims or challenges to the validity of our patents; risks related to changes in intellectual property laws covering our molecular diagnostic tests and pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decision in the lawsuit brought against us by the Association for Molecular Pathology et al; risks of new, changing and competitive technologies and regulations in the United States and internationally; and other factors discussed under the heading “Risk Factors” contained in Item 1A of our most recent Annual Report on Form 10-K, which has been filed
Page 2
with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. All information in the exhibits is as of the date of the exhibits, and Myriad undertakes no duty to update this information unless required by law.
| ITEM 9.01 | Financial Statements and Exhibits. |
(d)
| Exhibit |
Description | |
| 99.1 | Earnings release dated February 7, 2017 for the three months ended December 31, 2016. | |
| 99.2 | Earnings call slide presentation dated February 7, 2017 for the three months ended December 31, 2016. | |
The exhibit(s) may contain hypertext links to information on our website or other parties’ websites. The information on our website and other parties’ websites is not incorporated by reference into this Current Report on Form 8-K and does not constitute a part of this Form 8-K.
In accordance with General Instruction B-2 of Form 8-K, the information set forth in Item 2.02 and Item 7.01 and in Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Page 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MYRIAD GENETICS, INC. | ||||||
| Date: February 7, 2017 | By: | /s/ R. Bryan Riggsbee | ||||
| R. Bryan Riggsbee | ||||||
| Executive Vice President, Chief Financial Officer | ||||||
Page 4
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Earnings release dated February 7, 2017 for the three months ended December 31, 2016. | |
| 99.2 | Earnings call slide presentation dated February 7, 2017 for the three months ended December 31, 2016. | |
Page 5
Exhibit 99.1
| News Release | ||||||
| Media Contact: | Ron Rogers | Investor Contact: | Scott Gleason | |||
| (801) 584-3065 | (801) 584-1143 | |||||
| [email protected] | [email protected] |
Myriad Genetics Reports Fiscal Second-Quarter 2017 Financial Results
| • | Second-Quarter 2017 Total Revenues of $196.5 Million |
| • | Second-Quarter 2017 GAAP Diluted EPS of $0.09 and Adjusted EPS of $0.26 |
| • | Company Updates Fiscal Year 2017 Guidance and Issues Fiscal Third-Quarter 2017 Guidance |
SALT LAKE CITY, UTAH, Feb. 7, 2017 – Myriad Genetics, Inc. (NASDAQ: MYGN), a global leader in molecular diagnostics and personalized medicine, today announced financial results for its fiscal second-quarter 2017, provided an update on recent business highlights, updated its fiscal year 2017 financial guidance and issued fiscal third-quarter 2017 financial guidance.
“Revenues this quarter reached their highest level in the last three years, driven by a return to sequential growth in hereditary cancer revenue and strong results from GeneSight®,” said Mark C. Capone, president and CEO, Myriad Genetics. “Importantly, our diversification strategy is working with new products now contributing more than two thirds of testing volume. We also made steady progress on increasing reimbursement that will ultimately unlock significant operating leverage and long-term shareholder value.”
Financial Highlights
| • | The following table summarizes the financial results and product revenue for our fiscal second-quarter 2017: |
Revenue
| Fiscal Second-Quarter | % |
|||||||||||
| ($ in millions) | 2017 |
2016 |
||||||||||
| Molecular diagnostic testing revenue |
||||||||||||
| Hereditary cancer testing revenue |
$ | 143.9 | $ | 165.6 | (13 | %) | ||||||
| GeneSight testing revenue |
21.7 | NA | NM | |||||||||
| Vectra DA testing revenue |
10.7 | 11.3 | (5 | %) | ||||||||
| Prolaris testing revenue |
3.1 | 1.9 | 63 | % | ||||||||
| EndoPredict testing revenue |
1.6 | 0.9 | 78 | % | ||||||||
| Other testing revenue |
2.9 | 2.9 | 0 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Total molecular diagnostic testing revenue |
183.9 | 182.6 | 1 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Pharmaceutical and clinical service revenue |
12.6 | 10.7 | 18 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Total Revenue |
$ | 196.5 | $ | 193.3 | 2 | % | ||||||
|
|
|
|
|
|
|
|||||||
Income Statement
| Fiscal Second-Quarter | % |
|||||||||||
| ($ in millions) | 2017 |
2016 |
||||||||||
| Total Revenue |
$ | 196.5 | $ | 193.3 | 2 | % | ||||||
| Gross Profit |
152.1 | 152.7 | (0 | %) | ||||||||
| Gross Margin |
77.4 | % | 79.0 | % | ||||||||
| Operating Expenses |
138.9 | 107.5 | 29 | % | ||||||||
| Operating Income |
13.2 | 45.2 | (71 | %) | ||||||||
| Operating Margin |
6.7 | % | 23.4 | % | ||||||||
| Adjusted Operating Income |
23.6 | 48.4 | (51 | %) | ||||||||
| Adjusted Operating Margin |
12.0 | % | 25.0 | % | ||||||||
| Net Income |
5.9 | 37.1 | (84 | %) | ||||||||
|
|
|
|
|
|
|
|||||||
| Diluted EPS |
0.09 | 0.50 | (82 | %) | ||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EPS |
$ | 0.26 | $ | 0.45 | (42 | %) | ||||||
|
|
|
|
|
|
|
|||||||
2
Business Highlights
| • | myRisk® Hereditary Cancer |
| • | Delivered sequential hereditary cancer growth of three percent in the fiscal second-quarter with hereditary cancer revenue of $144 million. |
| • | Oncology volumes grew on a sequential basis fueled by preferred provider agreements, the customizable myRisk panel launch and improved sales force productivity. |
| • | Signed a contract with Highmark Blue Shield to remain an in-network provider for hereditary cancer testing; ended the quarter with 65 percent of revenue under long-term contracts and greater than 95 percent of insurance plans in network. |
| • | GeneSight® |
| • | Volume grew 61 percent year-over-year to approximately 57,000 tests performed in the fiscal second-quarter. |
| • | Anticipate completing enrollment this month and ahead of schedule in a 1,200 patient clinical utility study evaluating GeneSight in patients with treatment resistant depression. |
| • | Presented a health economic analysis at the Neuroscience Education Institute Conference comparing the total costs for patients with anxiety whose medications were congruent versus incongruent with their GeneSight test report. The results showed that medication cost savings were $6,747 higher per member per year for patients that followed the GeneSight test recommendations. |
| • | Completed a payer demonstration project using the Optum healthcare informatics platform from United Health that demonstrated substantial cost savings associated with the use of GeneSight. Initiated similar demonstration projects with Humana and Anthem Blue Cross Blue Shield. |
| • | Vectra® DA |
| • | Volumes declined three percent in the second-quarter year-over-year with approximately 37,000 tests performed. |
| • | Demonstrated that the AMPLE study when analyzed in a conventional way corroborates prior studies showing Vectra DA can predict radiographic progression with high statistical significance. This analysis along with data from 25 published clinical studies will be presented to refute a draft local non-coverage determination (LCD) issued by Medicare. |
3
| • | Published an important clinical utility study for Vectra DA in Arthritis and Rheumatology. The study evaluated the ability of Vectra DA to predict response to biologic or non-biologic therapy in methotrexate incomplete responders. In the study, patients with a low Vectra DA score were statistically significantly more likely to respond to triple therapy relative to a biologic, and patients with high Vectra DA scores were statistically significantly more likely to respond to a biologic than triple therapy. |
| • | Vectra DA was included in the United Rheumatology professional guidelines that represent approximately 10 percent of rheumatologists in the United States. |
| • | Initiated our first payer demonstration project with an independent practice association in Southern California. This project will evaluate the impact of Vectra DA on patient outcomes and healthcare costs in a real world setting and will be used to support potential coverage of the test. |
| • | Prolaris® |
| • | Volumes grew 33 percent year-over-year with approximately 4,700 tests ordered. |
| • | Received a draft LCD from Palmetto GBA for favorable intermediate patients that would represent a market expansion of approximately 30,000 patients per year in the United States. Prolaris is the only test to receive proposed Medicare coverage in this patient population. |
| • | EndoPredict® |
| • | Revenues grew 78 percent year-over-year to $1.6 million in the fiscal second-quarter. |
| • | Received a favorable technical assessment for EndoPredict from the Blue Cross Blue Shield association tech assessment organization Evidence Street. In total, we have received positive coverage decisions from payers that represent 70 million lives. |
| • | The Integrated Oncology Network (ION) recently made EndoPredict its preferred test for their physicians. ION is the largest physician service organization in oncology representing 50 percent of community oncologists in the United States. |
| • | Confirmed that EndoPredict will be launched in the United States in fiscal year 2017. |
| • | myPath® Melanoma |
| • | The third clinical validation study and second clinical utility study were accepted for publication. Myriad intends to submit its reimbursement dossier to Medicare and private payers by the end of fiscal year 2017. |
4
| • | Companion Diagnostics |
| • | Completed the submission of the myChoice HRD pre-market approval (PMA) application to the FDA for review in conjunction with niraparib. |
| • | Data from the AstraZeneca SOLO2 study, which compared maintenance therapy with olaparib versus placebo in patients with platinum-sensitive relapsed ovarian cancer met its primary endpoint. These results further validate that BRCA status as determined by BRACAnalysis CDx® test can identify patients who are likely to benefit from therapy with olaparib. |
| • | International |
| • | International revenue grew to five percent of total product revenue. |
| • | Signed an agreement with AstraZeneca in Japan to submit BRACAnalysis CDx for approval by Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) in parallel with the PMDA review of AstraZeneca’s novel PARP inhibitor, olaparib. |
| • | Signed an agreement with AstraZeneca to perform Tumor BRACAnalysis testing in six Latin American countries. |
| • | Share Repurchase |
| • | During the quarter, the Company repurchased approximately 600,000 shares, or $10 million, of common stock under our share repurchase program and ended the quarter with approximately $161 million remaining on our current share repurchase authorization. |
Fiscal Year 2017 and Fiscal Third-Quarter 2017 Financial Guidance
Below is a table summarizing Myriad’s updated fiscal year 2017 and fiscal third-quarter 2017 financial guidance:
| Revenue | GAAP Diluted Earnings Per Share |
Adjusted Earnings Per Share |
||||||||
| Fiscal Year 2017 |
$745-$755 million |
$ | 0.31-$0.36 | $ | 1.00-$1.05 | |||||
| Fiscal Third-Quarter 2017 |
$188-$190 million |
$ | 0.08-$0.10 | $ | 0.23-$0.25 | |||||
|
|
|
|
|
|
||||||
5
These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during its conference call today to discuss the fiscal second-quarter financial results and fiscal year 2017 and fiscal third-quarter 2017 financial guidance.
Conference Call and Webcast
A conference call will be held today, Tuesday, February 7, 2017, at 4:30 p.m. EDT to discuss Myriad’s financial results for the fiscal second-quarter, business developments and financial guidance. The dial-in number for domestic callers is (800) 630-4153. International callers may dial (303) 223-12698. All callers will be asked to reference reservation number 21842407. An archived replay of the call will be available for seven days by dialing (800) 633-8284 and entering the reservation number above. The conference call along with a slide presentation will also will be available through a live webcast at www.myriad.com.
About Myriad Genetics
Myriad Genetics Inc., is a leading personalized medicine company dedicated to being a trusted advisor transforming patient lives worldwide with pioneering molecular diagnostics. Myriad discovers and commercializes molecular diagnostic tests that: determine the risk of developing disease, accurately diagnose disease, assess the risk of disease progression, and guide treatment decisions across six major medical specialties where molecular diagnostics can significantly improve patient care and lower healthcare costs. Myriad is focused on three strategic imperatives: maintaining leadership in an expanding hereditary cancer market, diversifying its product portfolio through the introduction of new products and increasing the revenue contribution from international markets. For more information on how Myriad is making a difference, please visit the Company’s website: www.myriad.com.
Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, EndoPredict, myPath, myRisk, Myriad myRisk, myRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice HRD, Vectra GeneSight, and Prolaris are trademarks or registered trademarks of Myriad Genetics, Inc. or its wholly owned subsidiaries in the United States and foreign countries. MYGN-F, MYGN-G
6
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (Unaudited)
| (in millions, except per share amounts) | Three Months Ended | Six Months Ended | ||||||||||||||
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2015 | |||||||||||||
| Molecular diagnostic testing |
$ | 183.9 | $ | 182.6 | $ | 348.9 | $ | 354.5 | ||||||||
| Pharmaceutical and clinical services |
12.6 | 10.7 | 25.0 | 22.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenue |
196.5 | 193.3 | 373.9 | 376.8 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Cost of molecular diagnostic testing |
37.4 | 34.1 | 71.6 | 65.0 | ||||||||||||
| Cost of pharmaceutical and clinical services |
7.0 | 6.5 | 12.7 | 12.1 | ||||||||||||
| Research and development expense |
18.6 | 16.7 | 38.0 | 33.9 | ||||||||||||
| Selling, general, and administrative expense |
120.3 | 90.8 | 232.2 | 177.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total costs and expenses |
183.3 | 148.1 | 354.5 | 288.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
13.2 | 45.2 | 19.4 | 88.5 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
0.3 | 0.1 | 0.6 | 0.2 | ||||||||||||
| Interest expense |
(2.6 | ) | (0.1 | ) | (3.3 | ) | (0.1 | ) | ||||||||
| Other |
1.2 | (0.2 | ) | (0.6 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income (expense) |
(1.1 | ) | (0.2 | ) | (3.3 | ) | 0.1 | |||||||||
| Income before income taxes |
12.1 | 45.0 | 16.1 | 88.6 | ||||||||||||
| Income tax provision |
6.2 | 7.9 | 11.4 | 21.1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | 5.9 | $ | 37.1 | 4.7 | $ | 67.5 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) attributable to non-controlling interest |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) attributable to Myriad Genetics, Inc. stockholders |
$ | 5.9 | $ | 37.1 | 4.7 | $ | 67.5 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings per share: |
||||||||||||||||
| Basic |
$ | 0.09 | $ | 0.53 | $ | 0.07 | $ | 0.97 | ||||||||
| Diluted |
$ | 0.09 | $ | 0.50 | $ | 0.07 | $ | 0.92 | ||||||||
| Weighted average shares outstanding |
||||||||||||||||
| Basic |
68.2 | 70.5 | 68.5 | 69.6 | ||||||||||||
| Diluted |
68.3 | 73.8 | 68.9 | 73.1 | ||||||||||||
7
Consolidated Balance Sheets (Unaudited)
| (in millions) | Dec 31, 2016 | Jun. 30, 2016 | ||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 108.1 | $ | 68.5 | ||||
| Marketable investment securities |
54.4 | 90.5 | ||||||
| Prepaid expenses |
12.1 | 18.4 | ||||||
| Inventory |
51.3 | 38.3 | ||||||
| Trade accounts receivable, less allowance for doubtful accounts of $7.8 in 2017 and $6.8 in 2016 |
107.6 | 91.7 | ||||||
| Prepaid taxes |
4.2 | 3.8 | ||||||
| Other receivables |
3.9 | 3.3 | ||||||
|
|
|
|
|
|||||
| Total current assets |
341.6 | 314.5 | ||||||
| Property, plant and equipment, net |
54.7 | 58.3 | ||||||
| Long-term marketable investment securities |
55.5 | 79.9 | ||||||
| Intangibles, net |
506.4 | 227.5 | ||||||
| Goodwill |
315.4 | 195.3 | ||||||
| Other assets |
2.5 | 5.0 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,276.1 | $ | 880.5 | ||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 22.9 | $ | 21.1 | ||||
| Accrued liabilities |
57.7 | 49.5 | ||||||
| Deferred revenue |
2.2 | 1.7 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
82.8 | 72.3 | ||||||
| Unrecognized tax benefits |
24.6 | 24.0 | ||||||
| Other long-term liabilities |
8.8 | 7.8 | ||||||
| Contingent consideration |
137.1 | 10.4 | ||||||
| Long-term debt |
204.0 | — | ||||||
| Long-term deferred taxes |
86.1 | 17.9 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
543.4 | 132.4 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, 68.1 and 69.1 shares outstanding at December 31, 2016 and June 30, 2016 respectively |
0.7 | 0.7 | ||||||
| Additional paid-in capital |
831.8 | 830.1 | ||||||
| Accumulated other comprehensive loss |
(13.9 | ) | (9.5 | ) | ||||
| Accumulated deficit |
(85.7 | ) | (73.2 | ) | ||||
|
|
|
|
|
|||||
| Total Myriad Genetics, Inc. stockholders’ equity |
732.9 | 748.1 | ||||||
| Non-Controlling interest |
(0.2 | ) | — | |||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
732.7 | 748.1 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 1,276.1 | $ | 880.5 | ||||
|
|
|
|
|
|||||
8
Consolidated Statement of Cash Flows (Unaudited)
| (in millions) | Dec 31, 2016 | Dec 31, 2015 | ||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 4.7 | $ | 67.5 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
22.1 | 13.5 | ||||||
| Non-cash interest expense |
0.3 | — | ||||||
| Gain on disposition of assets |
(0.2 | ) | (0.4 | ) | ||||
| Share-based compensation expense |
15.2 | 16.3 | ||||||
| Impairment of cost basis investment |
2.5 | — | ||||||
| Bad debt expense |
18.1 | 14.5 | ||||||
| Loss on extinguishment of debt |
1.3 | — | ||||||
| Deferred income taxes |
2.9 | 29.8 | ||||||
| Unrecognized tax benefits |
0.6 | 1.5 | ||||||
| change in fair value of contingent consideration |
(3.2 | ) | — | |||||
| Changes in assets and liabilities: |
— | |||||||
| Prepaid expenses |
8.3 | 2.8 | ||||||
| Trade accounts receivable |
(24.4 | ) | (11.1 | ) | ||||
| Other receivables |
(2.4 | ) | (5.3 | ) | ||||
| Inventory |
(10.4 | ) | (4.1 | ) | ||||
| Prepaid taxes |
(0.4 | ) | (38.5 | ) | ||||
| Accounts payable |
(2.0 | ) | (4.1 | ) | ||||
| Accrued liabilities |
(5.0 | ) | (0.5 | ) | ||||
| Deferred revenue |
0.5 | — | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) operating activities |
28.5 | 81.9 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures for equipment and leasehold improvements |
(3.9 | ) | (2.1 | ) | ||||
| Acquisitions, net of cash acquired |
(216.1 | ) | — | |||||
| Purchases of marketable investment securities |
(49.0 | ) | (100.7 | ) | ||||
| Proceeds from maturities and sales marketable investment securities |
108.9 | 71.3 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) investing activities |
(160.1 | ) | (31.5 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Net proceeds (payments) from common stock issued under share-based compensation plans |
1.0 | 84.9 | ||||||
| Net proceeds from revolving credit facility |
204.0 | — | ||||||
| Net proceeds from term loan |
199.0 | — | ||||||
| Repayment of term loan |
(200.0 | ) | — | |||||
| Fees paid for extinguishment of debt |
(0.6 | ) | — | |||||
| Repurchase and retirement of common stock |
(31.6 | ) | (62.9 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
171.8 | 22.0 | ||||||
|
|
|
|
|
|||||
| Effect of Foreign exchange rates on cash and cash equivalents |
(0.7 | ) | (1.8 | ) | ||||
| Net increase in cash and cash equivalents |
39.5 | 70.6 | ||||||
| Cash and cash equivalents at beginning of year |
68.5 | 64.1 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 108.0 | $ | 134.7 | ||||
|
|
|
|
|
|||||
9
Safe Harbor Statement
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the Company’s hereditary cancer business returning to more normal volume trends; transforming the Company into a larger and more diversified personalized medicine company and delivering upon the Company’s five-year strategic goals; the percent of revenue under long-term contract and the percent of insurance plans in network; the Company’s submission of its first module to the FDA for myChoice HRD; the Company’s expectation that enrollment will be completed ahead of schedule in a 1,200 patient clinical utility study evaluating GeneSight in patients with treatment resistant depression in February 2017; the Company’s expectation that EndoPredict will be launched in the U.S. in fiscal year 2017; the Company’s expectation that it will submit its reimbursement dossier for myPath Melanoma to Medicare and private payers by the end of fiscal year 2017; the Company’s third-quarter revenue guidance of $188 to $190 million, adjusted earnings per share of $0.23 to $0.25, and diluted earnings per share guidance of $0.08 to $0.10, and the Company’s updated fiscal full year revenue guidance of total revenue of $745 to $755 million, adjusted earnings per share guidance of $1.00 to $1.05, and diluted earnings per share guidance of $0.31 to $0.36, as further discussed under the caption “Fiscal Year 2017 and Fiscal Third-Quarter 2017 Financial Guidance”; and the Company’s strategic directives under the caption “About Myriad Genetics.” These “forward-looking statements” are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described or implied in the forward-looking statements. These risks include, but are not limited to: the risk that sales and profit margins of our existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to our ability to transition from our existing product portfolio to our new tests; risks related to changes in the governmental or private insurers’ reimbursement levels for our tests or our ability to obtain reimbursement for our new tests at comparable levels to our existing tests; risks related to increased competition and the development of new competing tests and services; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and pharmaceutical and clinical services, including our ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying our molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating our
10
laboratory testing facilities; risks related to public concern over our genetic testing in general or our tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to our ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to our ability to successfully integrate and derive benefits from any technologies or businesses that we license or acquire, including but not limited to our acquisition of Assurex, Sividon and the Clinic; risks related to our projections about the potential market opportunity for our products; the risk that we or our licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying our tests; the risk of patent-infringement claims or challenges to the validity of our patents; risks related to changes in intellectual property laws covering our molecular diagnostic tests and pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decision in the lawsuit brought against us by the Association for Molecular Pathology et al; risks of new, changing and competitive technologies and regulations in the United States and internationally; the risk that we may be unable to comply with financial operating covenants under our credit or lending agreements; the risk that we will be unable to pay, when due, amounts due under our credit or lending agreements; and other factors discussed under the heading “Risk Factors” contained in Item 1A of our Annual report on Form 10-K for the fiscal year ended June 30, 2016, which has been filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Statement regarding use of non-GAAP financial measures
In this press release, the Company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Company’s business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached schedules.
11
Following is a description of the adjustments made to GAAP financial measures:
| • | Acquisition - amortization of intangible assets: Represents recurring amortization charges resulting from the acquisition of intangible assets, including developed technology and database rights. |
| • | Acquisition – transaction related costs: Costs related to closing and integration of acquired companies |
| • | Tax impact related to equity compensation – Changes in effective tax rate based upon ASU 2016-09 |
| • | Earn-out true up – Non-cash expenses related to valuation adjustments of earn out payments tied to recent acquisitions |
| • | One-time debt restructuring charges – Charges related to the restructuring of the company’s debt from a one-year term loan to a revolving credit facility |
| • | One-time non-deductible tax penalties – One-time tax penalty associated with payroll audit |
| • | Impairment of Raindance Investment – One-time impairment charge associated with Myriad’s investment in Raindance Technologies |
The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
12
Reconciliation of GAAP to Non-GAAP Financial Measures
for the Three and Six Months ended December 31, 2016 and 2015
(Unaudited data in millions, except per share amount)
| Three Months Ended | Six Months Ended | |||||||||||||||
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2015 | |||||||||||||
| Revenue |
196.5 | 193.3 | 373.9 | 376.8 | ||||||||||||
| GAAP Cost of molecular diagnostic testing |
$ | 37.4 | $ | 34.1 | $ | 71.6 | $ | 65.0 | ||||||||
| GAAP Cost of pharmaceutical and clinical services |
7.0 | 6.5 | 12.7 | 12.1 | ||||||||||||
| Acquisition - Integration related costs |
— | — | — | — | ||||||||||||
| Acquisition - amortization of intangible assets |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP COGS |
$ | 44.4 | $ | 40.6 | $ | 84.3 | $ | 77.1 | ||||||||
| Non-GAAP Gross Margin |
77 | % | 79 | % | 77 | % | 80 | % | ||||||||
| GAAP Research and Development |
$ | 18.6 | $ | 16.7 | $ | 38.0 | $ | 33.9 | ||||||||
| Acquisition - Integration related costs |
— | — | (0.1 | ) | — | |||||||||||
| Acquisition - amortization of intangible assets |
(0.1 | ) | (0.1 | ) | (0.2 | ) | (0.2 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP R&D |
$ | 18.5 | $ | 16.6 | $ | 37.7 | $ | 33.7 | ||||||||
| GAAP Selling, General and Administrative |
$ | 120.3 | $ | 90.8 | $ | 232.2 | $ | 177.3 | ||||||||
| Acquisition - Integration related costs |
(1.1 | ) | — | (11.0 | ) | — | ||||||||||
| Acquisition - amortization of intangible assets |
(9.2 | ) | (3.1 | ) | (14.5 | ) | (6.2 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP SG&A |
$ | 110.0 | $ | 87.7 | $ | 206.7 | $ | 171.1 | ||||||||
| GAAP Operating Income |
$ | 13.2 | $ | 45.2 | $ | 19.4 | $ | 88.5 | ||||||||
| Acquisition - Integration related costs |
1.1 | — | 11.1 | — | ||||||||||||
| Acquisition - amortization of intangible assets |
9.3 | 3.2 | 14.7 | 6.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP Operating Income |
$ | 23.6 | $ | 48.4 | $ | 45.2 | $ | 94.9 | ||||||||
| Non-GAAP Operating Margin |
12 | % | 25 | % | 12 | % | 25 | % | ||||||||
| GAAP Net Income |
$ | 5.9 | $ | 37.1 | $ | 4.7 | $ | 67.5 | ||||||||
| Acquisition - Integration related costs |
1.1 | — | 11.2 | — | ||||||||||||
| Acquisition - amortization of intangible assets |
9.3 | 3.2 | 14.6 | 6.4 | ||||||||||||
| Tax impact related to equity compensation |
0.6 | (6.8 | ) | 3.0 | (10.5 | ) | ||||||||||
| Earn out true-up |
(5.1 | ) | — | (4.6 | ) | — | ||||||||||
| One-time debt restructuring charges |
1.3 | — | 1.3 | — | ||||||||||||
| One-time non-deductible costs |
1.4 | — | 4.2 | — | ||||||||||||
| Impairment of Raindance Investment |
3.4 | — | 3.4 | — | ||||||||||||
| Tax effect associated with non-GAAP adjustments |
(0.4 | ) | — | (4.3 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP Net Income |
$ | 17.5 | $ | 33.5 | $ | 33.5 | $ | 63.4 | ||||||||
| GAAP Diluted EPS |
$ | 0.09 | $ | 0.50 | $ | 0.07 | $ | 0.92 | ||||||||
| Non-GAAP Diluted EPS |
$ | 0.26 | $ | 0.45 | $ | 0.49 | $ | 0.87 | ||||||||
| Diluted shares outstanding |
68.3 | 73.8 | 68.9 | 73.1 | ||||||||||||
13
Free Cash Flow Reconciliation
(Unaudited data in millions)
| Three Months Ended | Six Months Ended | |||||||||||||||
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2016 | Dec 31, 2015 | |||||||||||||
| GAAP cash flow from operations |
$ | 31.4 | $ | 40.9 | $ | 28.5 | $ | 81.9 | ||||||||
| Capital expenditures |
(2.4 | ) | (1.1 | ) | (3.9 | ) | (2.1 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Free cash flow |
$ | 29.0 | $ | 39.8 | $ | 24.6 | $ | 79.8 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Acquisition - Integration related costs |
1.1 | — | 9.0 | — | ||||||||||||
| Cash paid at closing to Assurex vendors |
— | — | 6.8 | — | ||||||||||||
| Tax effect associated with non-GAAP adjustments |
(0.4 | ) | — | (6.1 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP Free cash flow |
$ | 29.7 | $ | 39.8 | $ | 34.3 | $ | 79.8 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Reconciliation of GAAP to Non-GAAP for Fiscal Year 2017 and Fiscal Third-Quarter 2017 Financial Guidance
The Company’s future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from guidance set forth below. Some of the factors that could affect the Company’s financial results are stated in the safe harbor statement of this press release. More information on potential factors that could affect the Company’s financial results are included under the heading “Risk Factors” contained in Item 1A in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in the Company’s Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
| Fiscal Year 2017 | ||||
| Diluted net income per share |
||||
| GAAP diluted net income per share |
$ | 0.31 - $0.36 | ||
| Acquisition - amortization of intangible assets |
0.48 | |||
| Acquisition costs & one-time expenses |
0.21 | |||
|
|
|
|||
| Non-GAAP diluted net income per share |
$ | 1.00 - $1.05 | ||
|
|
|
|||
| Fiscal Third-Quarter 2017 | ||||
| Diluted net income per share |
||||
| GAAP diluted net income per share |
$ | 0.08 - $0.10 | ||
| Acquisition - amortization of intangible assets |
0.13 | |||
| Acquisition costs & one-time expenses |
0.02 | |||
|
|
|
|||
| Non-GAAP diluted net income per share |
$ | 0.23 - $0.25 | ||
|
|
|
|||
14
Myriad Genetics Fiscal Second-Quarter 2017 Earnings Call 02/07/2017 Exhibit 99.2
Forward Looking Statements Some of the information presented here today may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. These statements are based on management’s current expectations and the actual events or results may differ materially and adversely from these expectations. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission, specifically, the Company’s annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in the Company’s projections or forward-looking statements. In this presentation, the Company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. The Company’s financial measures under GAAP include substantial one-time charges related to its acquisitions and ongoing amortization expense related to acquired intangible assets that will be recognized over the useful lives of the assets and charges related to executive severance. Management believes that presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Company’s business. A reconciliation of the GAAP to non-GAAP financial guidance is provided below. Forward Looking Statements Non-GAAP Financial Measures Fiscal Year 2017 GAAP diluted earnings per share $0.31 - $0.36 Acquisition – amortization of intangible assets $0.48 Acquisition – one time charges $0.21 Non-GAAP diluted earnings per share $1.00 - $1.05 For additional information on GAAP to non-GAAP reconciliation see: https://www.myriad.com/investors/gaap-to-non-gaap-reconciliation/
Second Quarter FY2017 Financial Results Beat Guidance on Both Top and Bottom Line 2Q17 Actual Results 2Q16 Actual Results YoY Growth Guidance Revenue $196.5 $193.3 2% $188 - $190 million GAAP EPS $0.09 $0.50 (82%) $0.06 - $0.08 Adjusted EPS $0.26 $0.45 (42%) $0.23 - $0.25 * Based on higher than anticipated closing costs in the quarter due to the earlier than expected closing of the Assurex acquisition
Key Accomplishments in 2Q17 Major Progress on Three Key Strategic Imperatives Strategic Imperative Accomplishment Continued Leadership in an Expanding Hereditary Cancer Market Grew hereditary cancer revenue by 3% sequentially Oncology volume up sequentially reversing 18 month trend Signed agreement with Highmark Blue Cross Blue Shield 65% of revenue under long-term contract; in network with >95% of plans Diversify Revenue with New Products Non-hereditary cancer testing reached 67% of volume and 27% of revenue GeneSight volume up 61% and revenue up 47% YoY Anticipate completing enrollment early in major prospective clinical utility study for GeneSight Received draft LCD for favorable intermediate prostate cancer patients for Prolaris SOLO2 study provides further validation for BRACAnalysis CDx Submission of PMA for myChoice HRD EndoPredict payer coverage now >x million lives myPath Melanoma dossier completed Grow Kit Products in Major International Geographies International revenue reached 5% of sales compared to <1% three years ago EndoPredict revenue grew 78% year-over-year following key reimbursement wins in France and Germany Signed companion diagnostic agreement with AstraZeneca in Japan and Latin America
Fiscal Second-Quarter 2017 Revenue By Product Achieved Highest Revenue in Last Three Years Product 2Q17 2Q16 YoY Growth Hereditary Cancer $143.9 $165.6 (13%) GeneSight $21.7 NA* NM Vectra DA $10.7 $11.3 (5%) Prolaris $3.1 $1.9 63% EndoPredict $1.6 $0.9 78% Other $2.9 $2.9 0% Total Molecular Diagnostic Revenue $183.9 $182.6 1% Pharmaceutical & Clinical Services $12.6 $10.7 18% Total Revenue $196.5 $193.3 2% (in millions) * Prior to the completion of the Assurex Health acquisition
Fiscal Second-Quarter Financial Results 2Q17 2Q16 YoY Growth Total Revenue $196.5 $193.3 2% Gross Profit $152.1 $152.7 (0%) Gross Margin 77.4% 79.0% NM Operating Income $13.2 $45.2 (71%) Adjusted Operating Income $23.6 $48.4 (51%) Adjusted Operating Margin 12.0% 25.0% NM Net Income $5.9 $37.1 (84%) Diluted EPS $0.09 $0.50 (82%) Adjusted EPS $0.26 $0.45 (42%) (in millions except per share data)
3Q17 and FY17 Financial Guidance Narrowing Financial Guidance Within The Previous Range Metric Fiscal Third-Quarter 2017 Fiscal Year 2017 Revenue $188 to $190 million $745 to $755 million GAAP Diluted EPS $0.08 to $0.10 $0.31 to $0.36 Adjusted EPS $0.23 to $0.25 $1.00 to $1.05 For additional information on GAAP to non-GAAP reconciliation see: https://www.myriad.com/investors/gaap-to-non-gaap-reconciliation/
Oncology Sees Volume Growth in 2Q17 Sales Force Productivity and New Strategies Leading to Positive Momentum Sales Force Replenishment ION and U.S. Oncology agreements Sales force productivity Launch of customizable panels
Myriad Remains In-Network With 95% of Plans Physicians and Patients Continue To Demand Myriad’s Differential Quality As out-of-network provider: Physicians continue to demand highest quality test Myriad maintains >80% of historic volume Typically reimbursed at 60% to 80% of list price
Substantial Diversification in Testing Volumes > Two Thirds of Volume Attributed to Non-Hereditary Cancer Tests 35% CAGR ≈180,000 tests 99% Hereditary Cancer ≈600,000 tests ≈ 33% Hereditary Cancer
Reimbursement Will Drive Significant Leverage $620M Annual New Product Revenue With Full Reimbursement Current Revenue Run Rate at Full Reimbursement $50M $90M $460M $20M $620M Combined
Landmark GeneSight Study Near Completion Study Will Enhance Already Strong Clinical Utility Data Around GeneSight Mean Improvement in HAM-D17 FDA Approved Medications* Data in Fall of 2017 *Sources: FDA summary bases of approvals Hall-Flavin DK, et al. Utility of integrated pharmacogenomic testing to support the treatment of major depressive disorder in a psychiatric outpatient setting. Pharmacogenetics and Genomics. 2013;23(10):535-548 Winner JG, et al. A prospective, randomized double-blind study assessing the clinical impact of integrated pharmacogenomic testing for major depressive disorder. Discovery Med. 2013;16(89): 219-227 Hall-Flavin DK, et al. Using a pharmacogenomic algorithm to guide the treatment of depression. Transl Psychiatry. 2012;2:e 172
Strong New Health Economic Data For GeneSight Mounting Evidence Supporting Substantial Cost Savings Year One Cost Savings With GeneSight Data in CY17 Sources: Winner JG, et al. Combinatorial pharmacogenomic guidance for psychiatric medications reduces overall pharmacy costs in a 1 year prospective evaluation. Curr Med Res Opin. 2015 Jul 23:1-11. [PMID: 26086890] Winner JG, Allen JD, et al. Psychiatric pharmacogenomics predicts health resource utilization of outpatients with anxiety and depression. Transl Psychiatry. 2013;3:e300. doi:10. 1038/tp.2013.2 Data presented at the Neuroscience Education Institute Annual Conference 2016
Most MDD Patients are Seen in Primary Care Significant Opportunity to Leverage Large Preventive Care Sales Team Treating Physician for Patients With MDD Most MDD patients are seen by primary care consisting of general practice, internal medicine and OB GYNs Top 16,000 primary care physicians and OB GYN channel order almost half of the prescriptions for MDD
Data Supports Vectra DA’s Ability to Predict RP Correct Analysis of AMPLE Study Further Adds to This Claim Sources: SWEFOT Year 1: Hambardzumyan K, et al. Ann Rheum Dis. 2015;74:1102–9. AMPLE: Curtis et al. Arthritis Rheumatol. 2016 Nov 3. doi: 10.1002/art.39981. AMPLE: Fleischmann et al. Arthritis Rheumatol. 2016 Dec 19. DOI: 10.1002/art.40021. Leiden: van der Helm-van Mil et al. Rheumatology (Oxford). 2013;53:839–846. OPERA: Brahe et al. Arthritis Rheumatol. ACR 2016 Abstract 2520.
Vectra DA Predictive of Therapy Response Patients With a Low Vectra Score Do Substantially Better on Low-Cost Therapy Rate of Response Low Vectra DA Score High Vectra DA Score p=0.006 p=0.04 Sources: *Hambardzumyan K, Saevarsdottir S, Forslind K, et al. A multibiomarker disease activity score and the choice of second-line therapy in early rheumatoid arthritis after methotrexate failure. Arthritis Rheumatol. December 19, 2016.
Draft LCD Would Expand Coverage For Prolaris 50% of Prostate Cancer Patients (>100,000/yr) Would be Covered 200,000 localized prostate cancer patients Medicare Medicare (Favorable Intermediate) Medicare Non - Covered Commercial Non - Covered Commercial Covered United States Prolaris Insurance Coverage Copyright © 2017 Myriad Genetics, Inc., all rights reserved. www.Myriad.com.
Ramping Payer Coverage for EndoPredict Now Covered by Plans Representing 70 Million Lives Commercial Covered Submit dossier to Medicare in Q317 Favorable recommendation from BCBS tech assessment committee Evidence Street Coverage decisions from payers representing 70 million lives
Final myPath Melanoma Studies Accepted for Publication Dossier To Be Submitted to Medicare and Private Payers by End of FY17 myPath Melanoma Diagnostic Accuracy myPath Melanoma Diagnostic Accuracy myPath Melanoma Clinical Utility n=437 patients n=736 patients n=218 patients n=182 patients Sources: Data presented at ASDP: Diagnostic Distinction of Malignant Melanoma and Benign Nevi by a Gene Expression Signature and Correlation to Clinical Outcome. Clarke L et al. Clinical validation of a gene expression signature that differentiates benign nevi from malignant melanoma J Cutan Pathol 2015; 42:244-252. Cockerell et al. The Influence of a Gene Expression Signature on the Diagnosis and Recommended Treatment of Melanocytic Tumors by Dermatopathologists. Medicine. 2016; 95(40):e4887
Multiple PARP Clinical Studies to Report in CY17 8 Additional Pivotal Clinical Study Results Expected Indication Number of Studies First Data Expected Total Patients HER2- metastatic breast cancer 3 AZN olaparib data reported 160,000 Neoadjuvant TNBC 1 Jun. 2017 70,000 Other ovarian 3 Mar. 2017 50,000 Pancreatic 1 Dec. 2017 100,000 Total 380,000
International Revenue Contributing to Growth Significant Progress Toward Achieving Strategic Goals International Product Revenue as a Percentage of Total Revenue Goal to have international product revenue comprise 10% of sales
Diagnostics Are the Keystone for Personalized Medicine Focused on Six Medical Specialties with Over $200B in Waste ≈$700B in U.S. Healthcare Spending 30% Healthcare Spending Waste* Oncology Preventive Care Urology Dermatology Autoimmune Neuroscience Diagnostics represent 3% of spend but drive 70% of healthcare decision making** *Eliminating Waste in U.S. Healthcare **Clinical Lab Products Magazine – “The Value of Diagnostics” Copyright © 2017 Myriad Genetics, Inc., all rights reserved. www.Myriad.com.