Genetic testing company Myriad Genetics (NASDAQ: MYGN) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 3.1% year on year to $195.9 million. The company’s full-year revenue guidance of $815 million at the midpoint came in 3.7% below analysts’ estimates. Its non-GAAP loss of $0.03 per share was $0.02 above analysts’ consensus estimates.

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StockStory’s Take

Myriad Genetics’ first quarter results reflected a combination of headwinds and pockets of growth across its genetic testing portfolio. Management attributed the revenue decline primarily to lower volumes in its GeneSight pharmacogenomics test and softness in hereditary cancer testing for unaffected patients, while also highlighting continued strength in prenatal and oncology-related products. President and CEO Sam Raha described the quarter as challenging, noting, “Strength in our prenatal and oncology MyRisk tests were offset by softness in volume for GeneSight and unaffected hereditary cancer tests,” and acknowledged the need for improved execution in certain segments.

Looking ahead, the company’s full-year guidance was revised downward due to expectations for continued softness in GeneSight and hereditary cancer test volumes. Management emphasized a renewed focus on operational efficiency and product launches, especially the upcoming First Gene combined carrier screening and NIPS assay. Raha stated, “We have started taking deliberate steps to reduce our overall projected spending while prioritizing investments and resources on driving 2025 revenue and high-value new product development.” The leadership team signaled a period of strategic reassessment, with a strategy refresh expected later this year.

Key Insights from Management’s Remarks

Myriad Genetics’ management detailed the primary factors shaping first quarter performance and provided updates on business segments and upcoming initiatives.

• GeneSight Coverage Headwinds: The UnitedHealthcare policy change for GeneSight, effective January 1, contributed to a substantial reduction in revenue from this product line. Management explained that reduced marketing spend and commercial resources further impacted GeneSight’s volume, and noted that the majority of the $35 million revenue guidance cut was tied to these dynamics.

• Hereditary Cancer Workflow Challenges: Hereditary cancer testing for unaffected individuals experienced flat volumes due to slower-than-anticipated adoption of electronic medical record (EMR) integrations and lower ramp from breast cancer risk assessment programs. Management cited technical workflow hurdles and outlined plans to address these issues account by account, expecting several quarters to achieve stabilization.

• Prenatal and Oncology Segment Growth: Prenatal tests (notably ForeSight and Prequel) and MyRisk hereditary cancer tests for affected patients showed double-digit volume growth, offsetting some declines in other areas. The company highlighted the positive impact of recent product launches and deeper account penetration in these segments.

• Strategic Product Pipeline: Management reaffirmed its commitment to launching the First Gene combined carrier screening and NIPS assay by mid-year, advancing the PRECISE MRD minimal residual disease test (with clinical data presented at recent conferences), and introducing an AI-enabled Prolaris test for prostate cancer by year-end.

• Leadership and Organizational Changes: Recent executive appointments were emphasized, including Mark Verratti as Chief Operating Officer and Brian Donnelly as Chief Commercial Officer, alongside targeted hiring in oncology R&D and biopharma services. Management described these appointments as foundational to the company’s efforts to enhance execution and organizational design.

Drivers of Future Performance

Management’s outlook for the remainder of the year centers on addressing operational hurdles in core product lines while prioritizing efficient investment and strategic product launches. The company’s guidance reflects expectations for moderate sequential improvement and a continued focus on execution.

• GeneSight and Hereditary Cancer Recovery: Management plans to implement workflow solutions and targeted commercial strategies to increase GeneSight and hereditary cancer test volumes. However, they acknowledged near-term headwinds and expect a gradual ramp-up as EMR integrations and risk assessment programs scale.

• Cost Control and Investment Focus: The company intends to reduce discretionary spending, limit headcount growth, and reallocate resources to high-priority projects, including key product launches and EMR integration initiatives. Management expects these steps to drive incremental margin improvement without compromising strategic growth.

• Product Launch Milestones: Upcoming launches of the First Gene combined carrier screening/NIPS assay and the AI-enabled Prolaris test are expected to be important catalysts for revenue growth, contingent on timely execution and successful market adoption.

Top Analyst Questions

• Doug Schenkel (Wolfe Research): Questioned the complexity of Myriad’s narrative and the timeline for simplifying business operations; management suggested clarity will take several months and identified oncology, volume growth, and new product launches as key metrics.
• Puneet Souda (Leerink Partners): Asked about potential payer risks for GeneSight beyond UnitedHealthcare and provider behavior; management stated no additional payer losses have occurred and provider ordering patterns remain stable.
• David Westenberg (Piper Sandler): Requested details on the slow ramp in hereditary cancer testing for unaffected patients; management attributed it to technical EMR workflow issues and outlined ongoing account-specific solutions.
• Matt Sykes (Goldman Sachs): Inquired about the nature of cost savings; management confirmed cuts are focused on discretionary spend and infrastructure, not core product development or commercial teams.
• Tejas Sawant (Morgan Stanley): Asked about MRD product sensitivity milestones and the timeline for strategy changes; management highlighted upcoming clinical data releases and committed to a phased strategy refresh by late 2025.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) progress on workflow improvements and EMR integrations that could boost hereditary cancer and GeneSight test volumes, (2) execution and market reception of new product launches, particularly First Gene and AI-enabled Prolaris, and (3) the effectiveness of cost control measures in supporting margin stabilization. Updates on clinical data for the PRECISE MRD test and additional payer coverage wins will also be important markers of future performance.

Myriad Genetics currently trades at a forward P/E ratio of 32.6×. Should you load up, cash out, or stay put? Find out in our free research report.

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