Myriad's Cancer Demand Looks Strong-But Reimbursement Is Eating the Payout

Demand held up, but reimbursement is dragging down revenue

Myriad still looks like a monetization story more than a demand story. Clinical usage appears intact, but less of that activity is translating into collected revenue. For investors, that shift matters because activity alone is no longer enough if tests are not clearing the reimbursement gate at acceptable economics.

The contrast in the latest quarter is straightforward. Second-quarter revenue fell 11% year over year, while total test volume declined only 1%. Average revenue per test fell 9%. If demand were weakening across the board, volume likely would have dropped more. Instead, the picture looks more like pricing, reimbursement, or timing pressure eroding the payout on otherwise resilient demand.

Management also is not describing flat clinical traction. Second-quarter Cancer Care Continuum test volume growth of 6% year-over-year suggests the business still has a usable demand base. The bull case is that reimbursement improvements can lift economics without needing new demand. The bear case is that payment pressure may be strong enough to offset even healthy ordering trends.

That is why the next update matters. Myriad said it is engaging payers and executing revenue cycle initiatives to improve reimbursement predictability. If those efforts work, the same underlying demand can produce better revenue conversion.

Myriad's test demand still shows up in the funnel

Cancer Care Continuum and Mental Health are still growing

The clearest support for the bull case is that Myriad's core businesses are still attracting patients. In the first quarter, Cancer Care Continuum volume rose 13% and Mental Health volume rose 7%, enough to offset a decline in Prenatal Health and leave total test volume nearly flat. That does not prove monetization is working, but it does show the ordering funnel is still active.

This was not a one-quarter event. By the end of 2025, Myriad had already reported another quarter of high single-digit hereditary cancer volume growth, along with improving volume trends for Prolaris and GeneSight. Clinicians are still ordering these tests, which means investors are looking at an existing demand base rather than a purely hypothetical one.

Product breadth is widening across the cancer pathway

Myriad is also broadening the range of tests available across the cancer journey. Management launched Precise MRD and received FDA approval of MyChoice CDx as a companion diagnostic for Zejula in advanced ovarian cancer.

That matters because a wider portfolio gives the company more opportunities to capture testing at different points in treatment. If demand remains healthy, a broader offering can improve where and how often Myriad participates in a patient's care pathway.

Strong demand gives reimbursement fixes a better chance

Skeptics are right to press on the fact that volume does not equal collection. Still, Myriad reported first quarter 2026 gross margin of 68.7%, which suggests the cost structure and mix were still supporting reasonable economics before the second-quarter step-down.

That is why demand matters to the investment case. If reimbursement improves, a healthier flow of tests gives the recovery more leverage than a turnaround would need from scratch.

Revenue per test is falling faster than usage

The gap between ordering and collecting is the problem

Demand alone does not solve the financial picture. The core issue is whether Myriad retains enough of each order to make the effort worthwhile. Earlier in the year, average revenue per test was still growing, and the company posted first quarter 2026 gross margin of 68.7%. By the second quarter, though, average revenue per test decreased 9%, and management said it was engaging payers and executing revenue cycle initiatives to improve payment predictability.

In diagnostics, a test only matters financially when the claim clears. Uneven coverage, delayed authorizations, or lower-than-list payer settlements can all create the same gap: healthy lab activity with a weaker cash payout.

Profitability has weakened, but not from an obvious operating collapse

The pressure is also showing up lower down. In the first quarter, Myriad reported adjusted EBITDA was $(4.5) million. By contrast, fourth-quarter 2025 adjusted EBITDA was $14.3 million. That deterioration is hard to ignore.

It does not look like a clean operating-breakdown story. Fourth-quarter 2025 gross margin was 70.0%, and in the third quarter of 2025 it reported gross margin was 69.9% while generating adjusted EBITDA was $10.3 million. Importantly, third- and fourth-quarter 2025 results both reflected previously discussed headwinds of $8.1 million that reduced reported revenue. That makes the recent decline in revenue per test more concerning, because it appears on top of previously known pressure rather than in isolation.

What would confirm the monetization fix

The key question is whether this is a temporary payment squeeze or a more durable shift to lower realized prices. Myriad said it Revised 2026 financial guidance to reflect second quarter results and updated assumptions for business trends in the second half of 2026, so investors should watch whether newer results start to diverge from that updated setup.

Three signals matter most:

• reported revenue begins tracking test activity more closely again
• profitability improves from first-quarter levels such as adjusted EBITDA was $(4.5) million
• payer and revenue-cycle efforts start showing up more consistently quarter over quarter

If those signals improve, the basic business logic still works: demand is already in the funnel. If they do not, Myriad may remain a case study in strong clinical usage that is not converting into a proportionate financial payout.