Myriad Genetics: Can Turnaround Outweigh the Storm?

In the volatile world of biotech, few companies have faced as stark a contrast between promise and peril as Myriad Genetics (NASDAQ: MYGN). After a 49.5% stock decline over the past month, the company now stands at a critical crossroads. While headwinds such as reimbursement cuts and softening demand in key segments have triggered analyst downgrades, Myriad’s strategic realignments and emerging catalysts suggest a compelling turnaround narrative may be taking shape.

The Storm: Operational Challenges and Downgraded Guidance
Myriad’s Q1 2025 results revealed a mixed landscape. Total revenue dipped 3% year-over-year to $196 million, though adjusted for $16 million in headwinds—primarily from UnitedHealthcare’s withdrawal of coverage for its GeneSight® test—the figure grew 5%. The company’s Pharmacogenomics (PGx) segment bore the brunt of this disruption, with revenue plummeting 20% as insurers shifted away from multi-gene panel tests. Meanwhile, its Tumor Profiling division also stumbled, declining 5% following the sale of its international EndoPredict business.

These challenges forced Myriad to slash its 2025 revenue guidance to $807–$823 million (from $840–$860 million) and adjusted EPS to a breakeven range of $(0.02)–$0.02. Analysts have since downgraded the stock, citing execution risks and reimbursement uncertainties.

The Beacon of Hope: Strategic Initiatives and New Growth Drivers
Amid the turbulence, Myriad has doubled down on high-potential initiatives to reposition its portfolio:

1. Prenatal Testing Dominance: The segment’s 11% revenue growth underscores the success of its Prequel® Early Gestational Age test, launched in late 2024. This test expands the addressable market by enabling screening as early as 10 weeks of pregnancy. With carrier screening and non-invasive prenatal testing (NIPT) also driving growth, prenatal diagnostics now account for nearly 40% of Myriad’s revenue—a stable pillar amid volatility.

2. Precision Oncology Pivot: Myriad is sharpening its focus on oncology, where MyRisk® testing volumes grew 11% in the affected population. The company is also advancing its Precise® Minimal Residual Disease (MRD) test, which uses liquid biopsy to detect cancer recurrence. Clinical data presented at the American Association for Cancer Research (AACR) and upcoming updates at the American Society of Clinical Oncology (ASCO) in May 2025 aim to solidify its position in this high-margin space.

3. AI-Driven Innovation: A partnership with PATHOMIQ is set to deliver an AI-powered prostate cancer test by late 2025. This could address the $1 billion prostate testing market, where current methods often fail to distinguish aggressive tumors from benign ones.

4. Cost Discipline: Operating expenses were cut by $2.3 million year-over-year, with further reductions planned. Myriad now projects adjusted operating expenses to drop to $555–$565 million in 2025—a 5–6% reduction from prior guidance.

Technical and Fundamental Catalysts for a Rebound
Technically, Myriad’s stock is now deeply oversold, with an RSI of 18.11—the lowest since 2020—signaling extreme undervaluation. Historically, such readings have preceded sharp rebounds as short-term pessimism dissipates.

Fundamentally, the company’s Q1 results included a 40-basis-point improvement in gross margin to 69%, driven by lab efficiency gains. While the GAAP net loss of $0.1 million was minimal, the adjusted EPS of $(0.03) reflects non-cash items, including a $29 million tax benefit. With $92 million in cash and access to an additional $42 million credit facility, liquidity remains robust, even as adjusted cash flow dipped slightly.

Analyst sentiment, though cautious, shows a glimmer of optimism. Over the past 30 days, the consensus EPS estimate for 2025 rose 11.1%, a rare upward revision in a bearish environment. This aligns with Myriad’s Zacks Rank #2 (Buy), placing it in the top 20% of stocks ranked by earnings estimate momentum.

Risks and Considerations
Myriad’s path is far from guaranteed. The biggest near-term hurdle is UnitedHealthcare’s PGx policy, which could take years to reverse. Competitive pressures in prenatal testing—particularly from rivals like Illumina’s Natera—also loom. Additionally, the success of the AI prostate test and MRD platform hinges on clinical validation and regulatory approval timelines.

The Bottom Line: A High-Reward, High-Risk Opportunity
Myriad Genetics is a stock for investors willing to bet on resilience. With a deeply oversold technical backdrop, a strategic pivot toward high-growth oncology and prenatal segments, and a balance sheet that can weather current headwinds, the company is positioned to rebound if its new initiatives gain traction.

While risks are significant, the current valuation—trading at just 3x forward sales—offers a margin of safety. For aggressive investors, this could be the moment to position for a potential turnaround. Monitor closely for catalysts such as ASCO data in May or signs of stabilization in PGx demand.

The verdict? Myriad’s stock is now a high-stakes bet on execution. For those with a long-term horizon, the pieces are in place to turn the storm into a tailwind.