Myriad Genetics still way ahead of burgeoning competition

Myriad Genetics, the Salt Lake City-based provider of diagnostic tests and lab services, said the company retained 92% of the lucrative laboratory testing market for the BRCA1 and BRCA2 genes during its most recent fiscal year.

Until a Supreme Court decision in June of last year, Myriad Genetics was the sole provider of tests used to determine whether a woman has the BRCA genes, which put her at a higher risk of being diagnosed with hereditary breast and ovarian cancers. The tests are sold for about $3,300.

Since the 2013 ruling, about a dozen laboratory services companies, including Quest Diagnostics and Laboratory Corporation of America, have started selling BRCA testing.

The company’s total revenue rose 27% to $778.2 million in its fiscal 2014, which ended June 30, compared with $613.2 million in fiscal 2013. Net income for the fiscal year increased 20% to $176.2 million, compared with $147.1 million in 2013.

Myriad Genetics President and CEO Peter Meldrum told investors during a call that the company has retained 92% of the BRCA testing market despite the entry of competitors and a recent decision by Horizon Blue Cross and Blue Shield of New Jersey, which stopped covering Myriad’s version of the tests in June.

Still, the percentage of revenue generated by BRCA testing fell. While they made up 75% of Myriad’s revenue in 2013, the tests—branded as BRACAnalysis—generated roughly 66% of total revenue in fiscal 2014.

Some patients who previously might have undergone BRCA testing may be taking another genetic test offered by Myriad. The MyRisk hereditary cancer panel, a more costly and more comprehensive test that looks for 25 genes associated with eight hereditary cancers, including breast and ovarian cancers, was launched in September and is expected to replace BRACAnalysis by summer of 2015. The new test generated $27.3 million in revenue in the company’s fourth quarter (BRACAnalysis testing generated $107.4 million). MyRisk is not yet available to all healthcare providers in the U.S.

Molecular diagnostic testing revenue rose 10% to $182.9 million in the fourth quarter. That business includes the women’s health and oncology segments, both of which report revenue from BRCA testing. (Women’s health revenue comes from testing provided to women at risk of hereditary breast or ovarian cancer and oncology revenue stems from testing provided to women who have been diagnosed with breast or ovarian cancers.)

Oncology revenue fell 10% to $90.2 million in the fourth quarter. The company attributed the quarterly decline to several factors, including a drop in Medicare reimbursement rates and the impact of “celebrity publicity” in the fourth quarter of fiscal 2013, when actress Angelina Jolie publicly disclosed that she had been tested for the BRCA genes.

Myriad said it expects total revenue in fiscal 2015 between $800 million and $820 million.

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