Myriad Genetics Gets a Law Firm Notice. The Real Story Is in the Collection Write-Down.

Levi & Korsinsky, a New York securities litigation firm, sent out a press release saying it is investigating Myriad Genetics for possible violations of federal securities laws. If you read nothing else about this, the takeaway is: investors can call the firm if they want to lose money and possibly get a small fraction of it back years from now. That's not the interesting part.

The interesting part is why the firm is sending the notice in the first place. Myriad Genetics reported second-quarter 2026 earnings on July 30, and something went wrong in the way the company measures whether it's actually going to get paid for the tests it already performed.

Revenue came in at $190.7 million, down 11% from a year earlier and well below the roughly $206 million the market expected. But the number that deserves more attention than the headline decline is buried in the quarter's average-revenue-per-test math: $11 million of the revenue drop was a retroactive adjustment. Myriad wrote down the estimated collectibility of cash for tests it had already delivered in prior periods. In other words, the company previously recognized revenue for tests where it now doesn't expect to receive the full amount.

That's not the same thing as losing a new customer. That's the company revising its own past revenue estimates downward because payers - health insurers that reimburse the cost of genetic tests - are either paying less or paying slower than management thought. The accounting rule that governs this says revenue is recognized when the performance obligation (running the test) is satisfied, using the amount of cash the company expects to collect. When that expectation changes, you adjust revenue. The adjustment flows through the current period. The $11 million is the gap between what Myriad told investors it would collect and what it now thinks is realistic.

Management called this "payer friction" and framed it as a process problem: more prior authorizations, more requests for medical records, higher denial rates. CEO Sam Raha said the company continues to "receive orders for medically necessary tests" but is "not receiving payment in a timely manner."

The problem with that framing is that a billing headache and an $11 million retrospective revenue write-down are not the same category of event. A billing delay is an operating cash-flow problem. A retroactive collection adjustment is a question about whether the company understood its own revenue base when it gave investors guidance in earlier quarters. And that's exactly the kind of question securities investigation notices are designed to flag.

Here's the mechanism. Myriad performs roughly 380,000 genetic tests per quarter across cancer screening, prenatal screening, and pharmacogenomic drug-selection panels. Each test generates revenue at an average price of about $500, though the hereditary cancer tests like MyRisk used to run closer to $1,100–$1,250 per test a few years ago. The company books the revenue when the test is run, based on its estimate of what it will actually collect from insurers and patients. If the company's estimate was too optimistic, it has to come back and reduce revenue later.

The cancer care segment saw volume growth of 6% in the quarter - so demand for the tests is not the issue - but revenue in that segment still fell 11% year-over-year because the average revenue per test dropped 15%. Management attributed the sharp Q2 deterioration to the "outsized prior-period collection adjustment," but the trend in per-test revenue decline has been building. For most of 2022 through early 2026, the average annual decline in per-test revenue for hereditary cancer testing was just 2%. In Q2 2026, it accelerated sharply, and the company says mitigating that pressure is a "top priority."

Meanwhile, the prenatal segment is bleeding volume - down 9% year-over-year to 144,000 tests, revenue down 16%. That's competitive and structural, not just reimbursement friction. And the mental health business, anchored by the GeneSight pharmacogenomic test, showed volume growth of 4% but revenue declined 3%, partly because of a write-off of aged receivables.

Three segments with three different kinds of revenue pressure. The common thread is that Myriad recognizes revenue before the money lands, and the assumptions about how much money will land are breaking.

The company cut full-year 2026 revenue guidance from $860–$880 million to $770–$790 million, roughly a $90 million midpoint reduction. It also suspended adjusted EBITDA guidance entirely - an unusual move that signals management doesn't think it can credibly commit to a profit forecast given the uncertainty. It hired a professional services firm and launched an efficiency program called "Ascend". It's doing a "strategic review" of its product portfolio. In plain English: the business model is under stress and the company is bringing in outsiders to figure out what to cut.

The stock, which closed at $5.37 on July 30 before earnings, dropped to $3.67 in after-hours trading, a 31.6% decline. As of today it's around $3.02, down roughly 50% over the last 20 days and down more than 50% year-to-date. The market cap is approximately $476 million.

Now, the law firm notice. Levi & Korsinsky's press release from May 2025 cited Myriad's Q1 2025 results, when revenue missed expectations and the company cited UnitedHealthcare reducing coverage of its GeneSight test. That was the trigger for the investigation notice, and the notice has been running ever since. These firms operate on a predictable model: a stock drops on disappointing news, the firm sends a press release inviting investors to contact them, and if a class action actually files, the firm earns a contingent fee from any eventual settlement. The notice itself isn't an allegation - it's a lead-generation advertisement wrapped in legal-sounding language.

But the notice exists because the pattern it describes is real. Myriad has been here before. The company previously settled a securities class action for $77.5 million. That earlier case centered on Myriad overstating revenue from hereditary cancer tests by $18 million and hiding the fact that the FDA was requesting changes to its GeneSight test. The stock fell 42% and then another 40% on those disclosures in 2019, and the CEO who'd been with the company for 17 years was suddenly gone. The settlement was finally approved in December 2023.

The current quarter's $11 million collection adjustment for prior periods sits in the same conceptual neighborhood as that old $18 million revenue overstatement. The difference is that this adjustment is a legitimate accounting correction for changed collection expectations, not necessarily a prior misstatement. But the securities law question isn't whether the company intentionally lied. It's whether management knew - or should have known - that payer reimbursement was deteriorating before it gave investors revenue guidance that assumed it wasn't. And whether it disclosed the risk of that deterioration with adequate clarity.

The simplest model for understanding what investors are buying here is to think of Myriad as a testing machine that runs before it gets paid, with the gap between running the test and receiving reimbursement funded by investor capital. The company raised revenue guidance in the past based on assumptions about what payers would cover. Those assumptions are now proven wrong, and the revision is flowing through the books as retroactive revenue reductions. The question that matters most isn't whether the tests are medically useful - they are, and volume in the cancer segment is still growing. The question is whether the company's revenue estimates are honest enough for the disclosures that preceded them.

Myriad's management is pivoting to oncology, expanding its Precise MRD product into colorectal and renal cancers, launching an AI-enabled version of its Prolaris prostate test, and trying to stabilize prenatal revenue with a new product called FirstGene. It also extended a licensing partnership with Burning Rock Biotech for HRD testing technology. These are real efforts, not empty words. But none of them solve the core structural problem: if payers keep tightening reimbursement for the existing test portfolio, every new product has to overcome the same headwind, and revenue per test keeps declining regardless of how many new assays the company launches.

To own Myriad right now is to believe that management can fix reimbursement before the cash runway runs short. The company still has roughly $199 million in available capital, which is enough for a few quarters of operating losses but not enough to sustain this kind of margin compression indefinitely. The guidance cut, the suspended EBITDA target, the hired consultants, the "strategic review" - all of these are signs that the internal projections no longer work.

The law firm notice is boilerplate. The underlying business mechanics are not.