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 5, 2019

 

MYRIAD GENETICS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

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):

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

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On February 5, 2019, Myriad Genetics, Inc. (“Myriad”) announced its financial results for the three and six months ended December 31, 2018.  The earnings release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

On its earnings conference call for the three and six months ended December 31, 2018, 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 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.

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(d)

 

 

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.

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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.

 

 

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Exhibit 99.1

  

News Release

Media Contact:Ron RogersInvestor Contact:Scott Gleason

(801) 584-3065(801) 584-1143

rrogers@myriad.comsgleason@myriad.com

 

 

Myriad Genetics Reports Fiscal Second-Quarter 2019 Financial Results

 

 

SALT LAKE CITY, Feb. 5, 2019 – Myriad Genetics, Inc. (NASDAQ: MYGN, “Myriad” or the “Company”), a global leader in molecular diagnostics and personalized medicine, today announced financial results for its fiscal second-quarter 2019, provided an update on recent business highlights, maintained its fiscal year 2019 financial guidance and provided fiscal third-quarter 2019 financial guidance.

"This quarter we saw a return to revenue growth for our hereditary cancer business, an acceleration in our prenatal testing and continued profitability improvements driven by the Elevate 2020 program,” said Mark C. Capone, president and CEO, Myriad Genetics. “Importantly, in the last month, we announced two pivotal events with the publication of the GeneSight GUIDED study and the launch of our expanded Women’s Health sales team, which have the potential to drive transformational growth and long-term shareholder value.”

 

 

 

 

 

 

 

 

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Financial Highlights

The following table summarizes the financial results for the fiscal second-quarter 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Business Highlights

 

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Fiscal Year 2019 and Fiscal Third-Quarter 2019 Financial Guidance

Below is a table summarizing Myriad’s fiscal year 2019 and fiscal third-quarter 2019 financial guidance:

 

 

Myriad’s fiscal year 2019 and third-quarter 2019 adjusted earnings per share guidance excludes the impact of stock based compensation expense, non-cash amortization associated with acquisitions and certain non-recurring expenses. 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 the conference call today and discuss the fiscal second-quarter financial results and fiscal year 2019 financial guidance.

 

Conference Call and Webcast

A conference call will be held today, Tuesday, February 5, 2019, 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 1-888-222-6159.  International callers may dial 1-303-223-4369.  All callers will be asked to reference reservation number 21914704.  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 five strategic imperatives:  building upon a solid hereditary cancer foundation, growing new product volume, expanding reimbursement coverage for new products, increasing RNA kit revenue internationally and improving profitability with Elevate 2020.  For more information on how Myriad is making a difference, please visit the Company's website: www.myriad.com.

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Myriad, the Myriad logo, BART, BRACAnalysis, Colaris, Colaris AP, myPath, myRisk, Myriad myRisk, myRisk Hereditary Cancer, myChoice, myPlan, BRACAnalysis CDx, Tumor BRACAnalysis CDx, myChoice HRD, EndoPredict, Vectra, GeneSight, riskScore Prolaris, ForeSight and Prequel 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.

 

 

 

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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 ability to become a trusted advisor transforming patient lives worldwide with pioneering diagnostics; the Company’s expectation that the publication of the GeneSight GUIDED study and the launch of the expanded Women’s Health sales team have the potential to drive transformational growth and long-term shareholder value; the Company’s belief that the study presented at SABCS demonstrates that EndoPredict can identify women who will benefit from extended endocrine therapy; the Company’s expectation that the study presented at SABCS is positioned to corroborate the ability of EndoPredict to predict chemotherapy benefit; the Company’s fiscal year 2019 and fiscal third-quarter 2019 financial guidance for revenue, GAAP diluted earnings per share, and adjusted earnings per share under the caption “Fiscal Year 2019 and Fiscal Third-Quarter 2019 Financial Guidance”; and the Company’s strategic imperatives under the caption “About Myriad Genetics.” These “forward-looking statements” are management’s present 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 the Company’s existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to the Company’s ability to successfully transition from its existing product portfolio to its new tests; risks related to changes in the governmental or private insurers’ reimbursement levels for the Company’s tests or the Company’s ability to obtain reimbursement for its new tests at comparable levels to its existing tests; risks related to increased competition and the development of new competing tests and services; the risk that the Company 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 the Company may not successfully develop new markets for its molecular diagnostic tests and pharmaceutical and clinical services, including the Company’s ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying the Company’s 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 the Company’s laboratory testing facilities; risks related to public concern over the Company’s genetic testing in general or the Company’s 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 the Company’s ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all;

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risks related to the Company’s ability to successfully integrate and derive benefits from any technologies or businesses that it licenses or acquires; risks related to the Company’s projections about the potential market opportunity for the Company’s products; the risk that the Company or its licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying the Company’s tests; the risk of patent-infringement claims or challenges to the validity of the Company’s patents; risks related to changes in intellectual property laws covering the Company’s 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 the Company may be unable to comply with financial operating covenants under the Company’s credit or lending agreements; the risk that the Company will be unable to pay, when due, amounts due under the Company’s credit or lending agreements; and other factors discussed under the heading “Risk Factors” contained in Item 1A of 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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.

Following is a description of the adjustments made to GAAP financial measures:

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.  

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Reconciliation of GAAP to Non-GAAP for Fiscal Year 2019

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.

 

 

 

 

Myriad Genetics Fiscal Second-Quarter 2019 Earnings Call February 5, 2019 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 link to reconciliation of the GAAP to non-GAAP financial guidance is provided above. Forward Looking Statements Non-GAAP Financial Measures For additional information on GAAP to non-GAAP reconciliation see: https://www.myriad.com/investors/gaap-to-non-gaap-reconciliation/ Fiscal Year 2019 GAAP diluted earnings per share $0.40-$0.45 Stock based compensation expense $0.30 Acquisition – amortization of intangible assets $0.80 Adjustments to GAAP financial measures $0.20 Non-GAAP diluted earnings per share $1.70-$1.75 Fiscal Third-Quarter 2019 GAAP diluted earnings per share $0.12 - $0.14 Stock based compensation expense $0.08 Acquisition – amortization of intangible assets $0.20 Adjustments to GAAP financial measures $0.02 Non-GAAP diluted earnings per share $0.42 - $0.44

Fiscal Year 2019 Second-Quarter Financial Results 2Q19 Actual Results 2Q18 Actual Results YoY Change Revenue (in mil.) $216.8 $187.9 15% GAAP EPS $0.03 $0.43 (92%) Adjusted EPS $0.38 $0.36 6% Organic Adjusted EPS* $0.46 $0.36 28% *Excludes $0.08 of dilution from the Counsyl acquisition in the fiscal second-quarter

Critical Success Factors to Achieve Strategic Goals Expand reimbursement coverage for new products Build upon solid hereditary cancer foundation Increase RNA kit revenue internationally Improve profitability with Elevate 2020 STRATEGIC GOALS >10% REVENUE GROWTH 7 PRODUCTS >$50M >10% INT’L REVENUE >30% OPERATING MARGIN Grow new product volume

Hereditary Cancer Revenue Returns to Growth for First Time Since FY14 Solid Foundation in Hereditary Cancer Market * ASC606 Revenue Growing Volume Market less than 10% penetrated 7% CAGR since FY13 8 sequential quarters with YoY growth New indications added 175,000 eligible patients in the U.S. and Japan riskScore driving deeper penetration – Developed new version for Hispanic women BRACAnalysis® CDx approved in first-line maintenance for ovarian cancer Stable Pricing Outlook 5 consecutive quarters with stable pricing Long-term contracts provide stable pricing into FY20 UNH contract fixed until FY21 Smaller price premium easily justifiable +4%

Record Test Volume in Fiscal Second-Quarter New Products Represent 75% of >1M Test Run Rate FY13 2Q19 Annualized Run Rate 180,000 Tests > 1 Million Tests 99% 25%

Markets Remain Highly Underpenetrated Three Pillars of Prenatal Market Success A frictionless customer experience with Myriad Complete Trusted Advisors with broad physician reach and comprehensive menu Differentiate products through pioneering science

Best Physician and Patient Workflow Solution in the Industry Myriad Complete is a Key Competitive Differentiator

Based Upon Week 8 HAM-D17 Scores GUIDED EndPoints Analysis Patients Remission Rate Response Rate Symptom Improvement All Patients 1,298 +47% p=0.005 +32% p=0.007 +14% p=0.069 Mildly Depressed Patients Excluded 1,167 +50% p=0.007 +30% p=0.013 +12% p=0.107 Green Exclusion (Patients entering on green medications only excluded) 786 +70% p=0.003 +40% p=0.008 +23% p=0.029 Red Switching (Mod. to Severe depressed patients entering on red medications that switched vs. those that did not) 213 +153% p=0.007 +71% p=0.036 +59% p=0.002 Medicare Eligible (Mod.to Severe depressed patients based upon age at time of entry) 165 Statistically Significant Statistically Significant Statistically Significant

Only Test To Answer the Three Critical Questions of Prognosis, Chemotherapy Benefit, and Extended Endocrine Benefit EndoPredict ® – One Test Three Clinical Answers Outperformed market leading test in TransATAC study Large clinical validation presented at the San Antonio Breast Cancer Symposium supports the ability of EndoPredict to predict chemotherapy benefit The only test to assess risk out to 15 years. Identifies patients who can safely forego extending endocrine therapy. Prognosis Chemotherapy Benefit Extended Endocrine Therapy Benefit

EndoPredict High Risk Patients Receive Statistically Significant Benefit From Chemotherapy EndoPredict Predictive of Chemotherapy Benefit Endocrine Therapy Alone Endocrine Therapy + Chemotherapy

Low Risk EndoPredict Patients Have Substantially Lower Risk of Distant Recurrence EndoPredict Can Guide Extended Endocrine Therapy Decision Rate of Distant Recurrence HR=4.77 p=0.0001 HR=4.52 p=0.0001

Key Catalysts in FY19 Steady International Growth PRODUCT REVENUE (IN MIL.) Near-Term Growth Drivers Approval for BRACAnalysis CDx in metastatic BC in Japan Filed for Japanese regulatory approval for BRACAnalysis CDx in first-line ovarian cancer Filed for Japanese regulatory approval for hereditary cancer testing (>3M eligible patients) Positive NICE recommendation for EndoPredict reimbursement in UK Potential EndoPredict reimbursement decisions in Germany and Italy in CY20

Adjusted Operating Margins (OM) Increase 460 BP Since Inception of Elevate 2020 Excluding Counsyl Meaningful Profitability Improvement Through Elevate 2020 Elevate 2020 Progress All business units except Dermatology now profitable Operating margins have increased 460 bp since inception of the program Vectra and International laboratory moves completed at the end of the fiscal 2Q19 TOTAL EXPENSES ($M)* ADJUSTED OPERATING MARGIN* 23.1% 18.5% * Excludes Counsyl

Financial Overview

FY 2019 Second-Quarter Revenue By Product Product 2Q19 2Q18 YoY Growth Hereditary Cancer $126.7 $122.2 4% GeneSight $24.0 $31.7 (24%) Prenatal Testing $31.2 - NM Vectra $11.8 $11.1 6% Prolaris $6.1 $4.2 45% EndoPredict $2.2 $2.0 10% Other $1.0 $1.9 (47%) Total Molecular Diagnostic Revenue $203.0 $173.1 17% Pharmaceutical & Clinical Services $13.8 $14.8 (7%) Total Revenue $216.8 $187.9 15% (in millions)

Fiscal Second-Quarter Financial Results GAAP Results Adjusted Results 2Q19 2Q18 YoY Growth 2Q19 2Q18 YoY Growth Total Revenue $216.8 $187.9 15% $216.8 $187.9 15% Gross Profit $164.7 $143.5 15% $165.4 $143.7 15% Gross Margin 76.0% 76.4% -40 bps 76.3% 76.5% -20 bps Operating Income $6.1 $6.3 (3%) $37.4 $37.0 1% Operating Margin 2.8% 3.4% -60 bps 17.3% 19.7% -240 bps Net Income $2.6 $30.9 (92%) $29.2 $25.9 13% EPS $0.03 $0.43 (93%) $0.38 $0.36 6%

FY19 and 3Q FY19 Financial Guidance Metric Fiscal Year 2019 3Q19 Revenue $855 to $865 million $216 to $218 million GAAP Diluted EPS $0.40 to $0.45 $0.12 to $0.14 Adjusted EPS $1.70 to $1.75 $0.42 to $0.44

Peter D. Meldrum (1947-2018)