Myriad's Q3 2025: Contradictions Emerge on Growth Strategy, R&D Allocation, and Market Penetration

Date of Call: November 3, 2025

Financials Results

• Revenue: $205.7M, down 4% YOY (management also referenced $206M and noted underlying growth of ~5% after adjusting for UHC GeneSight impact of $7M, EndoPredict divestiture ~$1M and a $8.6M prior-period benefit in Q3 2024)
• Gross Margin: 70.1% adjusted gross margin (management: ~70%, reiterated guidance range 69.5%–70%)

Guidance:

• Reaffirming 2025 guidance: Revenue $818M-$828M; Gross margin 69.5%-70%; Adjusted OpEx $562M-$568M; Adjusted EBITDA $27M-$33M; Adjusted EPS -$0.02 to $0.02.
• On track to launch updated MyRisk in November 2025.
• Precise MRD tumor-informed test expected for clinical use in H1 2026 (initial breast cancer indication).
• AI-enabled Prolaris test (PATHOMIQ) expected H1 2026; FirstGene prenatal commercial launch in 2026.
• Investing $35M+ multiyear to expand commercial, R&D and MRD programs while reallocating headcount toward sales.

Business Commentary:

* Revenue and Volume Trends: - Myriad Genetics reported revenue of $205.7 million for the third quarter of 2025, which was a 4% year-over-year decrease. - The decrease was primarily attributed to factors like the impact of UnitedHealthcare's policy change on GeneSight coverage and the divestiture of the EndoPredict European business. - Despite these headwinds, the company maintained strong adjusted gross margins of 70.1% and generated $10.3 million in adjusted EBITDA.

• Oncology Segment Growth:
• Myriad's total oncology revenue was $81.8 million, with a 1% decrease over the same quarter in 2024.
• The decrease was partly due to the impact of UnitedHealthcare's policy change on GeneSight coverage.

• However, the MyRisk test experienced 16% volume growth in the affected market and 11% in the unaffected market, reflecting strong demand for hereditary cancer testing.

• Prenatal and Mental Health Segment Performance:

• The women's health business delivered $85.2 million in revenue, an increase of 3% over the prior year period.
• Prenatal testing saw a modest rebound in volume growth, with continued improvement expected.

• GeneSight's volume grew by 8% year-over-year, driven by initiatives like expanding the ordering provider base and securing positive coverage policies across several states.

• Strategic Initiatives and Investments:

• Myriad launched an updated MyRisk test, aiming to support strong growth in 2026 and beyond.
• The company entered collaborations with SOPHiA GENETICS and PATHOMIQ to expand offerings in partnerships and enhance commercial excellence.
• Strategic investments are focused on expanding the commercial organization, enhancing capabilities, and funding R&D programs, especially for MRD, to drive sustained profitable growth.

Sentiment Analysis:

Overall Tone: Positive

• Management repeatedly stated they are "pleased with our results" and see "growing momentum as we head into Q4 and 2026," highlighted "$10.3 million of adjusted EBITDA" and reaffirmed full-year 2025 guidance; they emphasized product launch timing (MyRisk in Nov, Precise MRD and Prolaris H1 2026) and continued investments to drive profitable growth.

Q&A:

• Question from Puneet Souda (Leerink Partners LLC): With the commercial focus and investments, what offsets/savings will fund growth and how should we think about adjusted EBITDA in 2026 given the growth vs profitability trade-off?
  Response: Management: Reallocated cost savings via an organizational redesign to fund expanded commercial sales and targeted R&D so revenue should grow faster than operating expenses, enabling accelerated but profitable growth (no 2026 EBITDA number provided).

• Question from Puneet Souda (Leerink Partners LLC): On NIPT, did you see share loss from new entrants and how should we view the softer results versus consensus?
  Response: Management: Q2 operational execution issues have been addressed; volumes improved from a decline to flat and are pacing as expected, with FirstGene expected to expand addressable market and accelerate growth going forward.

• Question from David Westenberg (Piper Sandler & Co.): Can you explain friction in the new ordering/management system, why it persisted, and how single-gene NIPT/CONNECTOR data will affect competitiveness vs peers?
  Response: Management: High-volume customers temporarily shifted due to prior execution issues that are now fixed; regaining accounts takes time, and FirstGene (combined screen) plus upcoming data are expected to be competitive and expand the market.

• Question from David Westenberg (Piper Sandler & Co.): Will RHD be included, and what about ACOG, microdeletions/expanded carrier screening reimbursement and father-sample reimbursement prospects?
  Response: Management: RHD will be included in FirstGene; payers are increasingly reimbursing expanded carrier screening pre-guideline updates but formal reimbursement/guideline adoption and specific codes will take time and require evidence.

• Question from Kyle Boucher (TD Cowen): Hereditary cancer volume grew 11% — is that catch-up from EMR fixes or broader market acceleration?
  Response: Management: Growth is driven by workflow/EMR improvements, customer success efforts and breast cancer risk-assessment programs rather than a simple catch-up, and they expect further expansion.

• Question from Kyle Boucher (TD Cowen): Where will you add more partnerships after PATHOMIQ and SOPHiA?
  Response: Management: Focused on cancer care-continuum partnerships that expand therapy-selection, companion diagnostics and MRD capabilities to accelerate product breadth and commercialization.

• Question from Lauren Timmins (Jefferies LLC): HTT revenue down 4% despite 11% volume growth — what mix/ASP effects drove this and what KPIs will you target for the cancer care continuum in 2026?
  Response: Management: ASP decline driven by UnitedHealthcare GeneSight policy, EndoPredict divestiture and a nonrecurring prior-period benefit in Q3 2024 (adjusting for these implies ~5% underlying growth); KPIs will focus on expanding ordering provider base and cross-selling multiple products across customers.

• Question from Ricki Levitus (Guggenheim Securities): What is current average turnaround time for Prequel at 8 weeks and will FirstGene have similar TAT or move to 8 weeks?
  Response: Management: Turnaround times are industry-competitive (often ~1 week faster), Prequel's value is meeting patients at the 8-week visit, and FirstGene will target similar TAT and be moved to 8-week sampling commercially.

• Question from Lu Li (UBS Investment Bank): Given mid- to high-single-digit volume outlook for GeneSight and payer wins, how should we think about ASP in 2026 and will OpEx meaningfully decline?
  Response: Management: They expect continued ASP support from payer policy wins but provided no 2026 ASP guidance; OpEx savings are being reallocated to add sales headcount and commercial enablement rather than broad cuts.

• Question from Benjamin Mee (Stephens Inc.): What is the cadence of clinical data/releases for the PATHOMIQ-Prolaris combined assay over the next 12 months?
  Response: Management: First combined Prolaris product to launch in H1 2026 with additional follow-on offerings planned for 2027 addressing post-treatment prostate cancer segments.

• Question from Matthew Scalo (Myriad IR): Can you quantify how much of 2025 ASP benefit came from RCM/no-pay rate improvements versus coverage wins and how much runway remains?
  Response: Management: A ~1% improvement in no-pay rate roughly equals ~$8M revenue, but the UnitedHealthcare policy change complicates year-over-year quantification; mature products still have ~30% no-pay rates, indicating continued runway for RCM gains.

• Question from John Wilkin (Craig-Hallum Capital): What drove the meaningful uptick in MyRisk unaffected volume and will the expanded MyRisk panel further accelerate growth?
  Response: Management: EMR and workflow fixes, customer-success initiatives and breast-risk programs drove the uptick; the expanded MyRisk panel (meeting NCCN and ASCO recommendations) is expected to be an important growth catalyst in 2026.

• Question from Matthew Scalo (Myriad IR): Given GeneSight's momentum but UHC uncertainty, will GeneSight be deprioritized within the commercial organization?
  Response: Management: GeneSight remains important and will continue to receive focused commercial and payer efforts, but resource allocation will be disciplined with primary prioritization on the cancer care continuum.

Contradiction Point 1

Growth Strategy and Market Expansion

It involves the company's strategic focus and market expansion plans, which are crucial for investor understanding of Myriad's growth trajectory.

Can you explain the ongoing friction with the new ordering management system and why it persists into this quarter rather than resolving by Q2? How will single-gene NIPT contribute to your growth next year? - Puneet Souda (Leerink Partners LLC)

2025Q3: Myriad's FirstGene offers a combined NPIs and carrier screening, ensuring mother-only blood tests, and will be competitive scientifically. Potential for market expansion and acceleration of growth. - Mark Verratti(COO)

What is Myriad's strategy for competing in the oncology market? - William Bishop Bonello (Craig-Hallum Capital Group LLC)

2025Q2: Myriad aims to expand the application of its expert knowledge of genomics, leveraging its leadership in hereditary cancer and HRD as well as its trust and access to healthcare providers. Myriad will focus on MRD and breast cancer applications. - Samraat S. Raha(CEO)

Contradiction Point 2

Investment in R&D and Strategic Allocation

It highlights the company's approach to R&D investment and strategic allocation, which is critical for Myriad's long-term growth and competitiveness.

Are you expecting any reductions in OpEx, such as specific amounts? Are there other areas beyond R&D reallocation where you expect lower OpEx? - Matthew Scalo (Senior Vice President of Investor Relations)

2025Q3: We did get the 2nd half of our 2026 fiscal year R&D budget signed off by the Board at the end of last year, so we're all in on the R&D investment for 2026. Obviously, we're going to have to do it in a way that balances the return profile with the risk profile of the R&D, because we can't just invest it all in one thing. - Ben Wheeler(CFO)

How has traction for Prequel been since its launch? - Jason (Morgan Stanley)

2025Q2: Our spending profile will be a little bit different. We'll have more push-out of what we've talked about in the past around some of the pre-launch activities. We also have more concentration of those launch costs, those pre-launch activities, particularly in Q4. - Scott J. Leffler(CFO)

Contradiction Point 3

Revenue Growth and Market Penetration

It pertains to the company's expectations for revenue growth and market penetration, which are important for understanding Myriad's future financial performance.

On hereditary cancer business, is the 11% YoY volume growth due to catching up from EMR issues in previous quarters? What factors have driven market acceleration over the past 11 months? - Kyle Boucher (TD Cowen, Research Division)

2025Q3: No catch-up from EMR issues noted. Strong growth in unaffected market due to workflow improvements and customer engagement programs. Market remains underpenetrated, with significant growth potential. - Samraat Raha(CEO)

How should we assess portfolio growth in light of the guidance and new tests like MRD? - Kyle Boucher (TD Cowen)

2025Q2: The current 2025 fiscal year guidance reflects increased confidence in our ability to grow at or above market rates across the business, given the strong performance we've seen in the first half of the year. - Scott J. Leffler(CFO)

Contradiction Point 4

Volume Growth Expectations in Hereditary Cancer Testing

It involves differing expectations for volume growth in the hereditary cancer testing segment, which is a key area for company growth and investor focus.

Regarding the hereditary cancer business, is the 11% YoY volume growth a catch-up from prior EMR issues? What factors have driven the market acceleration over the past 11 months? - Kyle Boucher (TD Cowen, Research Division)

2025Q3: Hereditary cancer testing volume growth of 11% year-over-year. Organic volume growth of 10% year-over-year. We're very pleased with the performance on that front. - Samraat Raha(CEO)

How are you prioritizing GeneSight after payer decisions? - Unidentified Analyst (Guggenheim)

2024Q4: We're excited about the performance in HCT, which grew 9% year over year for the quarter. U.S. unaffected market was up 11% year-over-year, an acceleration of 2 points from the fiscal year's performance. - Mark Verratti(COO)

Contradiction Point 5

GeneSight Volume and ASP Expectations

It involves differing expectations for GeneSight's volume and ASP growth, which are crucial for financial forecasting and investor expectations.

What ASP assumptions are built into the 2026 guidance for GeneSight given mid-to-high single-digit volume growth expectations? - Lu Li (UBS Investment Bank, Research Division)

2025Q3: GeneSight team has exceeded volume expectations and won new 9 state payer coverage. Ben Wheeler: Pleased with health plans adopting medical policies and expect ASP support to continue. - Samraat Raha(CEO), Ben Wheeler(CFO)

Have other payers addressed GeneSight coverage, and is your guidance based solely on United's impact? - Puneet Souda (Leerink Partners)

2025Q1: We continue to see constructive opportunities for GeneSight's coverage expansion in the broader payer universe. - Scott Leffler(CFO)