Myriad Genetics Faces Cost Restructuring As UnitedHealthcare Ends GeneSight Coverage, Appoints New CEO

On Monday, in its earnings release, Myriad Genetics Inc. MYGN said Unitedhealth Group Inc’s UNH UnitedHealthcare will stop covering multi-gene panel pharmacogenetic testing, including Myriad Genetics’ GeneSight test, for its commercial, individual exchange, and certain managed Medicaid plans. This change takes effect in the first half of 2025.

In 2024, Myriad Genetics earned about $45 million from GeneSight testing through UnitedHealthcare, with $40 million from commercial plans and $5 million from managed Medicaid plans.

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While Myriad Genetics continues to pursue a resolution with UnitedHealthcare that allows its commercial and managed Medicaid enrollees to continue accessing the GeneSight test, there is no guarantee that these efforts will succeed. Accordingly, Myriad has streamlined operations and cost structure.

Myriad Genetics also reported:

• Fourth-quarter adjusted EPS of 3 cents, down from 4 cents a year ago, in line with the consensus.
• Fourth-quarter sales of $210.6 million — up 7% year over year, missing the consensus of $211.62 million.
• The Oncology business delivered revenue of $82.8 million in the fourth quarter of 2024.
• Hereditary cancer testing revenue in Oncology grew 8% year-over-year.
• Women's Health business delivered revenue of $87.2 million, and prenatal testing revenue grew 12% year-over-year.

Guidance: Myriad Genetics reaffirms 2025 adjusted EPS guidance of 7-11 cents compared to the consensus of 6 cents.

The company expects sales of $840 million-$860 million versus a consensus of $866.2 million.

CEO Change: Myriad Genetics appointed Sam Raha, the company’s current Chief Operating Officer, as President, CEO, and board member, effective April 30.

Raha will replace Paul J. Diaz, who is stepping down to join private equity firm Cressey & Company.

Analyst Reactions:

• JPMorgan writes that the fourth quarter miss was driven by softer volumes due to the focus on the launch of Prequel at 8 weeks gestational age and slower order activity among new EMR accounts.
• JPMorgan analyst Rachel Vatnsda writes that while the company’s progress on its recovery plan is promising, there is uncertainty about its long-term growth strategy beyond selling assets. Therefore, JP Morgan maintains the Underweight rating.
• UBS analyst Lu Li maintains Myriad Genetics with a Neutral and lowers the price target from $18 to $16.

Price Action: Myriad Genetics stock is down 14.2% at $11.83 at last check Tuesday.

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