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):  August 13, 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):

Securities registered pursuant to Section 12(b) of the Act:

 

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 August 13, 2019, Myriad Genetics, Inc. (“Myriad”) announced its financial results for the three and twelve months ended June 30, 2019.  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 twelve months ended June 30, 2019, 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 Fourth-Quarter and Full-Year 2019 Financial Results

 

 

SALT LAKE CITY, Aug. 13, 2019 – Myriad Genetics, Inc. (NASDAQ: MYGN, “Myriad” or the “Company”), a global leader in molecular diagnostics and precision medicine, today announced financial results for its fiscal fourth-quarter and full-year 2019, provided an update on recent business highlights and provided fiscal year and first-quarter 2020 financial guidance.

"Fiscal year 2019 revenue increased 14 percent with earnings up 18 percent.  Unfortunately, revenue in the fourth quarter was two percent below expectations largely due to lower reimbursement for our expanded carrier screening test,” said Mark C. Capone, president and CEO, Myriad Genetics. “Looking ahead to fiscal year 2020, with stabilized pricing, growing new product volumes and recent reimbursement advances with GeneSight^®, we are highly optimistic about our ability to deliver an inflection in revenue and earnings as we transition through the fiscal year.”  

 

 

 

 

 

 

 

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Financial Highlights

The following table summarizes the financial results for the fiscal fourth-quarter and full year 2019:

 

 

 

 

Recent Business Highlights

 

 

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GeneSight^®

 

 

 

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Fiscal Year 2020 and Fiscal First-Quarter 2020 Financial Guidance

Below is a table summarizing Myriad’s fiscal year 2020 and fiscal first-quarter 2020 financial guidance:

 

Myriad’s fiscal year 2020 and first-quarter 2020 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 fourth-quarter financial results and fiscal year 2020 financial guidance.

 

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Conference Call and Webcast

A conference call will be held today, Tuesday, August 13, 2019, at 4:30 p.m. EDT to discuss Myriad’s financial results for the fiscal fourth-quarter, business developments and financial guidance.  The dial-in number for domestic callers is 1-800-763-5615.  International callers may dial 1-212-231-2936.  All callers will be asked to reference reservation number 21927089.  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 precision 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 critical success factors:  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.

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 deliver an inflection in revenue and earnings as it transitions through fiscal year 2020; the potential expansion of the GeneSight LCD to primary care physicians; the planned sale of the German Clinic and the expectation that the sale will occur around the middle of fiscal year 2020; the Company’s fiscal year 2020 and fiscal first-quarter 2020 financial guidance for revenue, GAAP diluted earnings per share, and adjusted earnings per share under the caption “Fiscal Year 2020 and Fiscal First-Quarter 2020 Financial Guidance”; and the Company’s five critical success factors of 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 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; risks related to the Company’s ability to successfully integrate and derive benefits from any technologies or businesses

 

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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 2020

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 Fourth-Quarter 2019 Earnings Call August 13, 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 2020 GAAP diluted earnings per share $0.55-$0.65 Stock based compensation expense $0.30 Acquisition – amortization of intangible assets $0.80 Adjustments to GAAP financial measures $0.15 Non-GAAP diluted earnings per share $1.80-$1.90 Fiscal First-Quarter 2020 GAAP diluted earnings per share ($0.02)-$0.00 Stock based compensation expense $0.08 Acquisition – amortization of intangible assets $0.20 Adjustments to GAAP financial measures $0.04 Non-GAAP diluted earnings per share $0.30-$0.32

Fiscal Year 2019 Highlights FINANCIALS SOLID HEREDITARY CANCER FOUNDATION DIVERSIFY WITH NEW PRODUCTS - Revenue of $851 and adjusted EPS of $1.67 up 14% and 18% respectively - Hereditary cancer revenue grows for first time in five years - New colon, pancreatic, breast & prostate guidelines add 160,000 patients per year - ASBS guidelines recommend hereditary cancer testing for all breast cancer patients - New product volume reaches 800,000 tests representing 75% of test volume - GeneSight ® volume increases 17% year-over-year - Completed Counsyl integration - Submitted PMA for myChoice ® HRD in advanced ovarian cancer

Fiscal Year 2019 Highlights EXPAND REIMBURSEMENT INCREASE INTERNATIONAL REVENUE ELEVATE 2020 - GUIDED study published; GeneSight dossier submitted to all payers - UnitedHealth coverage decision for GeneSight - Launched employer and PBM channel – signed Kroger ® agreement - Completed publication supporting expanded gene criteria in ECS - Received favorable myPath ® Melanoma LCD from Medicare - New EndoPredict ® reimbursement in UK, Italy and Greece - Two new Japan CDx indications in metastatic breast cancer and ovarian cancer - Organic gross margins increased >300 basis points - Brought Counsyl ® from $12M quarterly loss to profitability in 3 quarters

Financial Overview

Fiscal Fourth-Quarter Revenue By Product Product 4Q19 3Q19 Seq. Growth Hereditary Cancer $119.0 $117.6 1% GeneSight $29.8 $29.6 1% Prenatal Testing $25.0 $30.6 (22%) Vectra® $12.2 $11.3 8% Prolaris® $6.3 $6.9 (9%) EndoPredict $3.0 $2.8 7% Other $1.6 $1.7 (6%) Total Molecular Diagnostic Revenue $196.9 $200.5 (2%) Pharmaceutical & Clinical Services $18.5 $16.1 15% Total Revenue $215.4 $216.6 (1%) (in millions)

Fiscal Fourth-Quarter Financial Results GAAP Results Adjusted Results 4Q19 4Q18 YoY Growth 4Q19 4Q18 YoY Growth Total Revenue $215.4 $193.9 14% $215.4 $193.9 14% Gross Profit $164.8 $148.2 11% $165.4 $151.1 9% Gross Margin 76.5% 76.4% +10 bps 76.8% 77.9% -110 bps Operating Income ($5.6) $17.8 NM $33.2 $41.5 (20%) Operating Margin (2.6%) 9.2% -1180 bps 15.4% 21.4% -600 bps Net Income ($4.2) $14.5 NM $30.7 $31.5 (3%) EPS ($0.06) $0.20 NM $0.41 $0.43 (5%)

FY20 and 1Q FY20 Financial Guidance Metric Fiscal Year 2020 1Q FY20 Revenue $865-$875 million $200-$202 million GAAP Diluted EPS $0.55-$0.65 ($0.02)-$0.00 Adjusted EPS $1.80-$1.90 $0.30-$0.32

Potential Upside Drivers to Financial Guidance Product 1H20 2H20 NCCN breast cancer guidelines U.S. CDx for pancreatic cancer Japan CDx for ovarian cancer U.S. CDx for prostate cancer Japan hereditary cancer Commercial payer coverage Employer/PBM coverage Medicare LCD expansion Expand sales force ACOG guidelines for average risk Updated ECS guidelines Medicare revenue Increased coverage U.S.CDx launch in ovarian cancer Launch of RP risk prediction ACR guidelines Launch of CVD risk prediction Incremental reimbursement coverage

Potential Market for GeneSight Psychotropic: $13B TAM Based upon $2,000 average selling price assumption. Depression Anxiety Psychiatry Primary Care $2.1B $2.8B $2.9B $4.8B $5.0B $7.6B $7.7B $4.9B = = = =

Key Clinical Evidence for GeneSight Switching Analysis2 (Patients Entering GUIDED on Medications With Significant GDI) Precision Medicine Analysis1 (Patients Entering GUIDED on Medications With Any GDI) Outcomes at Week-8 24 Week Durability Data 1 Data on file 2 Greden et al, Journal of Psychiatric Research, Jan. 2019, Impact of pharmacogenomics on clinical outcomes in major depressive disorder in the GUIDED trial: A large, patient- and rater-blinded, randomized, controlled study

Combinatorial Pharmacogenomics Superior to Single-GeneTesting The GeneSight combinatorial approach was more than twice as predictive of serum blood levels when compared to single-gene testing1 6.5 (p=0.01) 7.5 (p=0.007) 1 Combinatorial Pharmacogenomic Algorithm is Predictive of Citalopram and Escitalopram Metabolism in Patients With Major Depressive Disorder; Poster presented at the 2019 Clinical Pharmacogenetics Implementation Consortium (CPIC®) Annual Meeting

UnitedHealthcare to Cover GeneSight

Status of Coverage Decisions on GeneSight Payer/Tech Assessor Coverage Comments Medicare Yes Submitted dossier for coverage expansion to primary care CareFirst Yes All providers Kroger Yes Pharmacy intervention Fortune 50 Company Yes Coverage in 1Q20 UnitedHealthcare® Yes All providers Evidence Street® No Minimal evidence gaps – resubmitting for priority review Anthem® No Re-engaged following Kroger announcement eviCore® No Addressing errors in technical assessment; re-engaging with precision medicine analysis

Guideline Expansions in Hereditary Cancer Cancer Type Expansion in Guidelines Number of New Patients Qualifying for Testing CDx Indication? Prostate Cancer All metastatic prostate cancer; all patients with a family history of breast cancer regardless of Gleason score +40,000 Expected in FY20 Pancreatic Cancer All pancreatic cancer +40,000 Expected in FY20 Colorectal Cancer Lowered risk threshold to meet criteria for testing +41,000 No Metastatic Breast Cancer All metastatic breast cancer +40,000 Yes Breast Cancer All breast cancer patients +180,000 Expected in FY21

Positive Leading Indicators for Prenatal Market Growth 225 sales reps 80 sales reps 250 sales reps 85% market coverage A frictionless customer experience with Myriad Complete Trusted advisors with broad physician reach & comprehensive menu Differentiate products through pioneering science How we win:

Expanding Clinical Utility for Vectra Disease Activity Risk of Radiographic Progression Risk of Cardiovascular Events One test, three clinical answers which impact patient care

Precision medicine is entering a hyper-growth phase Molecular diagnostics are the keystone to improving patient outcomes and eliminating wasted spend Myriad is the global leader in this market Near-term catalysts can triple earnings Compelling investment opportunity Myriad: The Investment Thesis