Myriad Genetics Faces Revenue Headwinds as GeneSight Struggles Weigh on 2025 Outlook

Myriad Genetics, a leader in genetic testing, has issued a stark revision to its 2025 financial outlook, cutting annual revenue guidance by $35 million to $807–$823 million. The move underscores the severe impact of operational challenges in its GeneSight pharmacogenetic testing business, driven by a pivotal payer decision. Investors now grapple with the near-term risks to Myriad’s profitability, even as the company bets on innovation and cost discipline to stabilize its trajectory.

The GeneSight Downturn: A Payer-Driven Crisis

The root of Myriad’s troubles lies in a policy change by UnitedHealthcare (UHC), the nation’s largest health insurer. Effective early 2025, UHC discontinued coverage for multi-gene panel pharmacogenetic tests, including Myriad’s flagship GeneSight product. This decision slashed GeneSight revenue by 20% year-over-year in Q1 2025, to $31.0 million from $38.9 million. The immediate financial toll was a $10 million headwind in Q1 alone, directly contributing to Myriad’s 3% overall revenue decline to $195.9 million.

The UHC move has exposed vulnerabilities in Myriad’s reliance on a single payer for a key product. While the company insists no other major insurers have followed suit, the loss of UHC coverage has cast a shadow over the long-term viability of GeneSight. CFO Scott Leffler confirmed during earnings calls that this decision was the “primary driver” of the revenue miss, with its effects expected to linger through 2025.

Financial Fallout and Strategic Adjustments

The GeneSight downturn has rippled across Myriad’s financial metrics. Full-year adjusted EBITDA guidance was slashed to $19–$27 million, down from an initial $25–$35 million range, while adjusted EPS turned negative to $(0.02)–$0.02 (versus prior guidance of $0.07–$0.11). Gross margins also face pressure, narrowing to 68.5%–69.5% for 2025, compared to an earlier 69.5%–70.5% forecast.

To offset these headwinds, Myriad is streamlining its Pharmacogenomics division, reducing discretionary spending, and prioritizing cost efficiency. CEO Sam Raha emphasized a focus on “strategic investments in high-growth areas,” including AI-enabled diagnostics and expanded prenatal testing. These efforts include a planned AI-driven Prolaris prostate cancer test by year-end meiden 2025 and a new combined carrier screening/NIPS (non-invasive prenatal screening) assay launching in July.

Bright Spots in a Challenged Landscape

Amid the GeneSight struggles, Myriad’s other segments offer a glimmer of hope. Its prenatal testing business, fueled by early adoption of the Prequel® Early Gestational Age test, grew by 11% in Q1, contributing $49.3 million in revenue. Oncology testing also showed resilience, with hereditary cancer volumes up 11% in “affected population” categories, though pricing pressures kept revenue flat.

The company also highlighted progress in oncology innovation, including new clinical data for its Precise® MRD test (for cancer recurrence monitoring) and partnerships like its AI collaboration with PATHOMIQ. These initiatives, if successful, could diversify revenue streams and reduce reliance on GeneSight.

Market Context and Investment Considerations

Myriad’s stock has been under pressure since the Q1 results, reflecting investor anxiety over its near-term trajectory.

While the GeneSight setback is significant, the company’s cash reserves ($92 million as of Q1) and access to a $42 million credit facility provide a buffer. Additionally, its narrow net loss of $0.1 million in Q1—compared to a $26.0 million loss a year earlier—highlights improved operational efficiency, even in adversity.

Conclusion: Navigating Near-Term Headwinds for Long-Term Gains

Myriad’s revised guidance and financial struggles underscore the precarious balance between innovation and reimbursement risk in the diagnostics sector. The UHC decision has created a $10 million annualized revenue hole for GeneSight, and recovery will depend on payer negotiations, market share retention, and new product adoption.

However, the company’s diversified portfolio—bolstered by prenatal testing growth and oncology pipeline progress—offers a path to stabilization. If Myriad can execute its cost-cutting and innovation plans while mitigating further payer disruptions, its valuation (trading at ~8x 2025 EBITDA estimates) could prove attractive.

Investors should weigh these positives against lingering risks: reimbursement policy shifts, slower-than-expected product launches, and competitive pressures. For now, Myriad’s story remains one of resilience—its ability to navigate the GeneSight storm will determine whether its long-term vision outweighs the near-term pain.

Data as of Q1 2025 reports. Analysis assumes no further payer policy changes and successful execution of strategic initiatives.