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Myriad Genetics Shares Fall 30% on Q2 Earnings and Executive Leadership Change

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Shares of Myriad Genetics traded 30% lower after the firm released Q2/20 earnings and announced the appointment of a new interim CEO.

After U.S. markets closed yesterday afternoon, global molecular diagnostics and precision medicine company Myriad Genetics Inc. (MYGN:NASDAQ), announced Q2/20 financial results for the period ending December 31, 2019. The firm additionally provided an update on recent operational highlights and reported revised Q3/20 and FY/20 financial guidance.

The company reported that in Q2/19 total revenues decreased by 10% to $195.1 million, compared to $216.8 million in Q2/18. The firm indicated that in Q2/19 it had diluted earnings per share (EPS) of ($0.11) and Adjusted EPS of $0.23, compared to diluted EPS of $0.03 and Adjusted EPS of $0.38 for Q2/18.

The company's newly appointed President and Chief Executive Officer R. Bryan Riggsbee commented, "Revenue in the fiscal second quarter fell short of expectations largely due to the prenatal business. Prenatal cash collections were negatively impacted by issues in billing operations that occurred during the transition of the homegrown Counsyl billing system to an industry-standard system used by Myriad. We are in the process of implementing a number of initiatives focused on improving cash collections, have made several organizational changes to bolster growth and are evaluating additional initiatives...Despite recent payer related headwinds, we continue to see significant near-term prospects to drive increased revenue and I am highly focused on returning Myriad to a position of sustained long-term profitable growth."

The firm discussed some of the recent business highlights including that it has signed a fixed-price payer portfolio contract with UnitedHealthcare and grew hereditary cancer diagnostic volumes at a mid-single digit rate on a year-over-year basis.

The company also provided Q3/20 and FY/20 forward guidance. For Q3/20 the company expects Revenue of $172 million with GAAP diluted EPS of ($0.30) per share and Adjusted EPS of $0.02 per share. For FY/20 the company expects Revenue of $735 million with GAAP diluted EPS of ($0.80) per share and Adjusted EPS of $0.45 per share.

On the same day the company also announced that effective immediately R. Bryan Riggsbee, Chief Financial Officer, has been appointed Interim President and Chief Executive Officer, but will also continue to serve as CFO. The firm advised that Mark C. Capone has resigned as CEO and President and as a member of the Myriad's Board of Directors.

John T. Henderson, M.D., Chairman of the Board of Directors commented, "As we position Myriad for its next phase of growth and value creation, the Board and Mark have mutually agreed that now is the right time for a leadership transition...We are pleased to have a leader with Bryan's experience to step into the additional role of Interim CEO and provide continuity as we execute on our search for a permanent CEO...We are confident in Bryan's ability to drive the Company forward and will continue to support him and the entire executive team while we work to identify a permanent CEO...On behalf of the entire Board of Directors, I want to thank Mark for his leadership and contributions to Myriad over his more than 17-year tenure with the Company. We have had numerous scientific and medical advances during this time that have contributed significantly to the health and transformation of patients' lives around the world."

Myriad Genetics is headquartered in Salt Lake City , Utah and describes its business as "a leading molecular diagnostic and precision medicine company dedicated to being a trusted advisor transforming patient lives worldwide with pioneering molecular diagnostics. The company 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 Genetics began the day with a market capitalization of around $2.2 billion with approximately 74.39 million shares outstanding and a short interest of about 17.2%. MYGN shares opened nearly 30% lower today at $20.68 (-$8.61, -29.40%) compared to yesterday's $29.29 closing price and fell to a new 52-week low price this morning of $19.08. The stock has traded today between $19.08 to $21.02 per share and is presently trading at $20.51 (-$8.78, -29.98%).

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