Myriad Genetics: Navigating Cost Restructuring and Leadership Transition Amidst UnitedHealthcare's GeneSight Coverage Change

Myriad Genetics, Inc. (MYGN) faces significant challenges following UnitedHealthcare's (UNH) decision to end coverage for multi-gene panel pharmacogenetic testing, including Myriad's GeneSight test. This change, effective in the first half of 2025, will impact Myriad's revenue and profitability. In response, the company has initiated cost restructuring efforts and appointed a new CEO, Sam Raha, to lead the organization through this transition.

UnitedHealthcare's decision to stop covering multi-gene panel pharmacogenetic testing, including Myriad's GeneSight test, will have a substantial financial impact on the company. In 2024, Myriad earned approximately $45 million from GeneSight testing through UnitedHealthcare, with $40 million from commercial plans and $5 million from managed Medicaid plans. To mitigate this loss, Myriad has streamlined its operations and cost structure, aiming to maintain profitability despite the reduced revenue.

Myriad Genetics reported its fourth-quarter earnings on Monday, February 25, 2025, with adjusted EPS of 3 cents, down from 4 cents a year ago, in line with consensus estimates. Fourth-quarter sales of $210.6 million were up 7% year over year but missed the consensus of $211.62 million. The Oncology business delivered revenue of $82.8 million in the fourth quarter of 2024, with hereditary cancer testing revenue growing 8% year-over-year. The Women's Health business delivered revenue of $87.2 million, and prenatal testing revenue grew 12% year-over-year.



Myriad Genetics has reaffirmed its 2025 adjusted EPS guidance of 7-11 cents compared to the consensus of 6 cents. The company expects sales of $840 million-$860 million versus a consensus of $866.2 million. Despite the challenges posed by UnitedHealthcare's decision, Myriad remains committed to its long-term growth strategy and maintaining its market position.

Analysts have reacted to Myriad Genetics' cost restructuring efforts and financial performance. JPMorgan analyst Rachel Vatnsda maintains an Underweight rating on the stock, citing uncertainty about the company's long-term growth strategy beyond selling assets. UBS analyst Lu Li maintains a Neutral rating on the stock and lowered the price target from $18 to $16. Myriad Genetics' stock price has reacted to these developments, falling 14.2% to $11.83 at last check on Tuesday, February 25, 2025.

Myriad Genetics' cost restructuring efforts and the appointment of Sam Raha as the new CEO are crucial steps in navigating the challenges posed by UnitedHealthcare's decision to end GeneSight coverage. By focusing on operational efficiency, profitability, and strategic growth, Myriad Genetics aims to maintain its long-term growth trajectory and create value for shareholders. However, investors will closely monitor the company's progress and potential risks as it works to mitigate the loss of revenue from UnitedHealthcare.