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Myriad Genetics, Inc. Reports Results for First Quarter of Fiscal 2007
43% Revenue Growth and 95% Operating Income Growth Highlight Molecular Diagnostic Business
Salt Lake City, November 7, 2006—Myriad Genetics, Inc.
(Nasdaq: MYGN) (www.myriad.com)
today reported financial results for the first quarter of
fiscal 2007. For the three-month period ended September 30, 2006, molecular
diagnostic revenue increased to $30.9 million from $21.5 million in the same
quarter of the prior year, an increase of 43%. Molecular diagnostic revenue
for the first fiscal quarter also experienced a $2.0 million increase over the
previous quarter ended June 30, 2006. The majority of this growth resulted
from increased sample volumes and accelerated market penetration across all
four product lines.
For the first fiscal quarter ended September 30, 2006, gross profits from
molecular diagnostics were $22.7 million, compared with $15.7 million for the
same quarter of the prior year, an increase of 45%. The gross profit margin
on the molecular diagnostic business increased to 74% for the first quarter of
fiscal 2007, compared with 72% for the quarter ended June 30, 2006. Improved
gross profit margins primarily resulted from the introduction of new, more
efficient operating systems.
Operating income for the molecular diagnostic business for the first
quarter increased by 95% to $13.1 million, compared with $6.7 million from the
first quarter of last fiscal year. This growth resulted in an operating
margin of 42% in the first quarter of fiscal 2007, which is an 11 percentage
point increase, or 35% improvement, from the 31% operating margin in first
quarter of fiscal 2006.
Total revenues for the first quarter of fiscal 2007 were $33.5 million, up
34% from $25.1 million in the same quarter of the prior year. Research
revenues were $2.7 million for the first quarter of fiscal 2007, compared with
$3.6 million for first quarter of fiscal 2006. This decrease in research
revenue was primarily attributed to the successful completion of a research
collaboration.
Research and development expenses for the three months ended
September 30, 2006 were $26.4 million, compared with $18.5 million for the
same three-month period in the prior year. This increased investment in
research and development was primarily due to increased clinical trial
expenses associated with the continuing development of our therapeutic product
candidates targeted for prostate cancer, brain cancer, solid tumors, blood
cancer, metastatic cancer and Alzheimer's disease. Specifically, the Company
recently initiated a European Phase 3 trial of Flurizan™ in patients with
mild Alzheimer's disease. The European trial complements Myriad's ongoing
1,600 patient U.S. Phase 3 trial, which completed enrollment during the fiscal
quarter ended September 30, 2006. The European trial is designed to produce
Phase 3 safety and efficacy data for submission to the European Medicines
Agency (EMEA) in seeking marketing approval for Flurizan in patients with mild
Alzheimer's disease.
"We are very pleased with the continued growth in our molecular diagnostic
business and the advances in moving our drug candidates towards the market,"
said Peter Meldrum, President and Chief Executive Officer of Myriad Genetics,
Inc. "We believe that the remarkable growth in top-line revenues and the
substantial improvement in operating profits are indicative of a vigorous,
growing molecular diagnostic business."
Selling, general and administrative expenses for the first quarter of
fiscal 2007 were $14.1 million, compared with $10.9 million for the same
quarter of the prior year. This increase of 29% was primarily attributable to
costs associated with the 43% growth in molecular diagnostic revenues.
The non-GAAP net loss per share for the first quarter of fiscal 2007 was
$0.28, an improvement of $0.01 from the first quarter in the prior year
non-GAAP net loss per share of $0.29. Expense associated with employee stock
plans in accordance with SFAS 123R attributable to the first quarter of fiscal
2007 was $0.03 per share, versus $0.01 per share for the first quarter of the
prior year. Because the research analyst consensus for loss per share is a
blended average that currently includes some estimates incorporating equity
compensation expense and others that do not, we have reported loss per share
both on a non-GAAP basis with equity compensation expense excluded and on a
GAAP basis with the expense included for comparison. The GAAP net loss per
share for the first quarter of fiscal 2007 was $0.31, compared to a GAAP net
loss per share of $0.30 for the same quarter in the prior year.
As of September 30, 2006, management believes that Myriad remains in
strong financial condition, with approximately $212 million in cash, cash
equivalents and marketable investment securities. The Company has no debt or
convertible securities.
Conference Call and Webcast
A conference call with Company management will be held today at 10:00 a.m.
Eastern Standard Time, with investors and media to discuss these results and
recent events at the Company. Between 9:45 a.m. and 10:00 a.m., the dial-in
number for domestic callers is (888) 589-2820. International callers may dial
(706) 634-2173. All callers will need to reference conference ID number
9681049. An archived replay of the call will be available for 7 days by
dialing (800) 642-1687 or (706) 645-9291, and entering conference ID number
9681049. The conference call will also be audiocast over the Web and can be
accessed through: www.myriad.com.
Myriad Genetics, Inc. is a leading biopharmaceutical company focused on
the development and marketing of novel healthcare products. The Company
develops and markets proprietary molecular diagnostic products, and is
developing and intends to market a number of promising therapeutic products in
the fields of cancer, Alzheimer's disease and viral disease. Myriad's news
and other information are available on the Company's website at
www.myriad.com. Flurizan is a trademark of Myriad Genetics, Inc. in the
United States and other countries.
About Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are
prepared and presented in accordance with GAAP, in this release and during our
conference call as described above we use or plan to discuss non-GAAP
financial measures for net loss and diluted loss per share. Generally, a
non-GAAP financial measure is a numerical measure of a company's performance,
financial position or cash flows that either excludes or includes amounts that
are not normally excluded or included in the most directly comparable measure
calculated and presented in accordance with GAAP. A reconciliation between
non-GAAP and GAAP measures can be found in the accompanying table. Non-GAAP
financial measures should not be considered as a substitute for, or superior
to, measures of financial performance prepared in accordance with GAAP. These
non-GAAP financial measures do not reflect a comprehensive system of
accounting, differ from GAAP measures with the same captions and may differ
from non-GAAP financial measures with the same or similar captions that are
used by other companies.
We believe that, while these non-GAAP measures are not a substitute for
GAAP results, they provide a basis for evaluating the Company's operating
results because they facilitate the comparison of results for future periods
with results from past periods. We believe the calculation of net loss,
calculated without stock-based compensation expense, provides a meaningful
comparison to our net loss figures reported for prior quarters. These
non-GAAP measures have been reconciled to the nearest GAAP measure as required
under SEC rules.
We believe that both management and investors benefit from referring to
these non-GAAP financial measures in assessing our performance and when
planning, forecasting and analyzing future periods. These non-GAAP financial
measures also facilitate management's internal comparisons to our historical
performance as well as comparisons to our competitors' operating results. We
believe these non-GAAP financial measures are useful to investors both because
(1) they allow for greater transparency with respect to key metrics used by
management in its financial and operational decision making and (2) they are
used by our institutional investors and the analyst community to help them
analyze the health of our business.
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 strong financial position, increased
growth from sample volumes and accelerated market penetration for the
Company's molecular diagnostic products, improved gross profit margins from
the introduction of new, more efficient operating systems, continued growth in
molecular diagnostic product revenues and advances in moving the Company's
drug candidates towards the market, continued development of the Company's
therapeutic products in clinical trials and the expenses associated therewith
and the tremendous growth in top-line revenues and the substantial
improvement in operating profits being indicative of a vigorous molecular
diagnostic business. These forward-looking statements are based on
management's current expectations and are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
set forth or implied by forward-looking statements. These risks and
uncertainties include, but are not limited to, our inability to further
identify, develop and achieve commercial success for new products and
technologies; our ability to discover drugs that are safer and more
efficacious than our competitors; our ability to develop molecular diagnostic
products that help assess which patients are subject to greater risk of
developing diseases and who would therefore benefit from new preventive
therapies; the possibility of delays in the research and development necessary
to select drug development candidates and delays in clinical trials; the risk
that clinical trials may not result in marketable products; the risk that we
may be unable to successfully finance and secure regulatory approval of and
market our drug candidates, or that clinical trials will be completed on the
timelines we have estimated; uncertainties about our ability to obtain new
corporate collaborations and acquire new technologies on satisfactory terms,
if at all; the development of competing products and services; our ability to
protect our proprietary technologies; patent-infringement claims; 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 in our Annual Report on Form 10-K for the
year ended June 30, 2006, 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 this press release is as of November 7, 2006, and
Myriad undertakes no duty to update this information unless required by law.
Financial Charts Follow
On July 1, 2005 the Company adopted the provisions of Financial Accounting
Standards Board Statement No. 123R, Share-Based Payment (Statement 123R).
Statement 123R sets accounting requirements for "share-based" compensation to
employees, including employee stock purchase plans, and requires companies to
recognize in the statement of operations the grant-date fair value of stock
options and other equity-based compensation. The following table reconciles
between non-GAAP and GAAP net loss and diluted loss per share:
Three Months Ended
September 30, 2006 September 30, 2005
Employee Employee
Stock Stock
Non-GAAP Compensation Non-GAAP Compensation
Expense GAAP Expense GAAP
Net Loss ($11,064) ($1,361) ($12,425) ($9,002) ($239) ($9,241)
Diluted
Loss per
Share ($0.28) ($0.03) ($0.31) ($0.29) ($0.01) ($0.30)
MYRIAD GENETICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except Three Months Ended
per share amounts) Sep. 30, 2006 Sep. 30, 2005
REVENUES:
Molecular diagnostic revenue $30,851 $21,529
Research revenue 2,692 3,585
Total revenues 33,543 25,114
COSTS AND EXPENSES:
Molecular diagnostic cost of revenue 8,105 5,803
Research and development expense 26,352 18,466
Selling, general and administrative
expense 14,086 10,898
Total costs and expenses 48,543 35,167
Operating loss (15,000) (10,053)
Other income (expense):
Interest income 2,602 811
Other (27) --
2,575 811
Net loss ($12,425) ($9,242)
Basic and diluted loss per share ($0.31) ($0.30)
Basic and diluted weighted average
shares outstanding 39,700 30,866
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands) Sep. 30, 2006 Jun. 30, 2005
Cash, cash equivalents, and
marketable investment securities $212,115 $227,744
Trade receivables, net 23,162 20,820
Other receivables 746 1,397
Prepaid expenses 1,781 2,326
Equipment and leasehold
improvements, net 20,663 19,829
Other assets 4,349 4,487
Total assets $262,816 $276,603
Accounts payable and accrued
liabilities $22,889 $26,705
Deferred revenue 58 117
Stockholders' equity 239,869 249,781
Total liabilities and
stockholders' equity $262,816 $276,603
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