Yesterday, Myriad Genetics Inc. (MYGN) reported fourth quarter earnings of 37 cents per share from continuing operations. This was well above the Zacks Consensus Estimate of 23 cents. For fiscal year 2009, the company earned $1.38 per share from continuing operations.
Molecular Diagnostic Revenues for the quarter came in at $86.1 million, versus $64.7 million for the same period of the prior year, thus reflecting a 33% increase. Fiscal 2009 saw a 47% increase in revenues to $326.5 million from $222.9 million in the year-ago period. The improvement was attributable mainly to Myriad’s increased sales and marketing efforts, which have created higher demand for the company’s molecular diagnostic products.
However, revenue growth slowed down during the second half due to the recession. Myriad has undertaken several measures, including adding 50 new sales representatives, to increase sales further.
Gross profit for the quarter came in at $74.9 million or 87% of molecular diagnostic revenues, compared with $55.6 million or 86% of molecular diagnostic revenues in the year-ago quarter. For fiscal 2009, gross profit was $283.3 million compared with $190.5 million last year. The margin growth was primarily due to improvements in technology coupled with efficiency gains in the operation of the molecular diagnostics laboratory.
Research and Development expenses for fiscal 2009 stood at $17.9 million, compared to $18.5 million for fiscal 2008. R&D for the quarter was $4.4 million, slightly below the year-ago spend of $4.8 million.
Selling, general and administrative expenses for fiscal 2009 increased 26% to $138.9 million. The increase reflects the increased number of sales personnel, costs associated with the launch of two new products, Prezeon and OnDose.
For the 2009 fiscal fourth quarter, selling, general and administrative expenses increased 14% to $36 million over the prior year quarter. Myriad incurred additional legal and accounting costs in the quarter related to the spin-off of Myriad Pharmaceuticals, Inc. (MYRX).
We believe that selling, general and administrative expenses will continue to fluctuate in the coming quarters due to new product launches, growth in molecular diagnostic revenue and future non-cash stock option expense.
As a reminder, on July 1, 2009, Myriad Genetics completed the spin off of Myriad Pharmaceuticals, Inc. and Myriad Genetics. We believe that the separation of the profitable predictive medicine business with the higher risk drug development business should create better value for shareholders.
Each company will be able to pursue its long-term strategic initiatives, maximize its core technology strengths, seek new product opportunities, have a capital structure appropriate for its financial profile, and compete more effectively in its respective markets. Myriad Genetics would continue in the field of molecular diagnostics, while Myriad Pharmaceuticals would pursue development of therapeutic candidates in the areas of cancer and HIV.
We remain optimistic about the predictive medicine market and believe it will keep recording double-digit growth in the coming years. The molecular diagnostics business has enjoyed a boom in the past few years and we believe this momentum will continue in the coming years. We expect Myriad Genetics to ride the wave of high growth in the molecular diagnostics industry in the coming years.
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