Executive Summary / Key Takeaways

• Strategic Pivot to Cancer Care Continuum: Myriad Genetics is undergoing a focused transformation, prioritizing the Cancer Care Continuum (CCC) through enhanced R&D, commercial expansion, and strategic partnerships to drive accelerated profitable growth.
• Differentiated Technology & Pipeline: The company leverages proprietary, ultra-sensitive molecular diagnostics like MyRisk, Prequel at 8 weeks, and the upcoming Precise MRD, augmented by AI partnerships such as PATHOMIQ for Prolaris, to offer clinically superior and workflow-integrated solutions.
• Mixed Recent Financials with Underlying Strength: While Q3 2025 revenue saw a 4% year-over-year decline, adjusted for specific headwinds (UnitedHealthcare (UNH) GeneSight policy, prior period revenue, EndoPredict divestiture), underlying growth was 5%, supported by a robust 70.1% adjusted gross margin and positive adjusted EBITDA of $10.3 million.
• Outlook and Catalysts: Myriad reaffirms its FY 2025 guidance, projecting revenue between $818 million and $828 million, and anticipates high single-digit to low double-digit revenue growth over the next five years, driven by new product launches (MyRisk update, Precise MRD, AI-enabled Prolaris, FirstGene) and improved commercial execution.
• Key Risks and Competitive Dynamics: Significant risks include the ongoing impact of UnitedHealthcare's GeneSight policy, EMR integration challenges, and intense competition. Myriad aims to differentiate through its comprehensive portfolio, established provider trust, and technological edge in specific, high-growth segments.

The Evolving Landscape of Precision Diagnostics

Myriad Genetics, Inc. (NASDAQ:MYGN), founded in 1991, has evolved into a prominent molecular diagnostic testing and precision medicine company. Its core mission is to advance health and well-being by developing and offering molecular tests that assess disease risk, guide treatment decisions, and ultimately improve patient care across oncology, women's health, and pharmacogenomics. Over the past five years, Myriad has undergone a significant transformation, divesting non-strategic assets, restructuring its cost base, and strategically shifting investments towards growth initiatives. This journey has culminated in a refined strategy aimed at driving accelerated profitable growth, with a pronounced focus on the Cancer Care Continuum (CCC).

The broader diagnostics industry is characterized by rapid technological advancements, increasing demand for personalized medicine, and evolving reimbursement landscapes. Artificial intelligence (AI) is emerging as a critical driver, with its potential to enhance data processing, accelerate diagnostic insights, and optimize clinical workflows. Myriad's strategic responses, including its emphasis on AI partnerships and comprehensive genomic profiling, reflect these industry shifts. The company operates in a competitive environment, facing established players like Illumina (ILMN), Thermo Fisher Scientific (TMO), Quest Diagnostics (DGX), and NeoGenomics (NEO), each with their own strengths in technology, scale, or specialization. Myriad aims to carve out its niche by leveraging its deep clinical expertise, established provider relationships, and differentiated technological capabilities.

Technological Edge and Innovation Pipeline

Myriad's competitive moat is significantly bolstered by its proprietary diagnostic technologies and a robust innovation pipeline. The company's core offerings, such as the MyRisk Hereditary Cancer test, are considered industry gold standards, providing comprehensive DNA sequencing for assessing hereditary cancer risks. The upcoming updated MyRisk test, slated for launch in November 2025, will further enhance this differentiation by adding 15 actionable gene targets, making it the only panel to meet both NCCN high-risk assessment and ASCO strongly recommended guidelines. This expansion is expected to drive strong MyRisk growth in 2026 and beyond.

In prenatal health, Myriad's Prequel Prenatal Screen offers critical insights at 8 weeks gestational age, a notable advantage over other available tests that typically provide results at 10 to 12 weeks. This earlier detection window provides tangible benefits for patient management and clinical workflows. The company is also advancing its FirstGene Multiple Prenatal Screen, which entered early access in June 2025 and is set for a full commercial launch in 2026. FirstGene is designed to streamline prenatal genetic risk assessment by combining NIPS and carrier screening into a single assay, including RHD, without requiring paternal testing. This innovation has the potential to expand the prenatal market by offering a more complete and convenient screening solution.

A significant technological differentiator is Myriad's ultrasensitive tumor-informed Precise MRD (Molecular Residual Disease) test. This test, on track for clinical use in the first half of 2026 with an initial indication in Stage II/III breast cancer in the neoadjuvant setting, is designed to detect minimal residual disease in low-shedding tumors. Its ability to detect ctDNA down to two to five parts per million is crucial for identifying residual disease that might be missed by traditional imaging, thereby guiding treatment escalation or de-escalation. Clinical studies, including three MRD studies to be presented at the San Antonio Breast Cancer Symposium in December 2025, are generating robust evidence for its clinical utility.

Myriad is also strategically integrating artificial intelligence into its offerings. The partnership with PATHOMIQ, announced in February 2025, is set to launch the first AI-enabled Prolaris prostate cancer test in the first half of 2026. This multimodal approach combines Myriad's molecular insights with PATHOMIQ's AI platform, which extracts hidden insights from complex cancer morphological structures using H&E stained digital images, delivering results in one to two days. This collaboration positions Myriad as the only company to offer AI, biomarker, germline, and tumor profiling testing for prostate cancer, extending its reach into post-radical prostatectomy or radiation treatment selection, a market segment where Myriad currently does not participate. This technological integration is expected to accelerate the timeline for gaining Simon Level 1 evidence for Prolaris.

These technological advancements and R&D initiatives are critical for Myriad's long-term growth. They enhance the company's competitive moat by offering superior clinical utility, improved patient and provider experience, and expanded market opportunities. The focus on high-growth areas like MRD and AI-enabled diagnostics, combined with strategic partnerships, allows Myriad to accelerate market entry and potentially achieve higher average revenue per test and stronger margins.

Competitive Landscape and Strategic Positioning

Myriad operates in a highly competitive and dynamic diagnostic testing market. Its primary competitors include large, diversified life science companies like Thermo Fisher Scientific and Quest Diagnostics, as well as specialized genomics firms such as Illumina and NeoGenomics.

Illumina, a leader in DNA sequencing technology, provides foundational tools that Myriad and other diagnostic companies utilize. While Illumina's strength lies in its broad technological platforms and R&D scale, Myriad differentiates itself through its focus on clinical applications and actionable insights, particularly in hereditary cancer and companion diagnostics. Myriad's established reputation as the "gold standard" in hereditary cancer testing, coupled with its extensive commercial reach and trust among healthcare providers, provides a significant advantage.

Thermo Fisher Scientific, with its diversified portfolio spanning tools, diagnostics, and services, offers end-to-end solutions. Myriad competes by offering specialized, patient-centric tests that integrate seamlessly into clinical workflows, potentially providing greater accuracy in specific applications. Quest Diagnostics, a leader in high-volume, accessible testing, presents a challenge in terms of market reach and cost-effectiveness. Myriad counters this with its focus on advanced, proprietary diagnostics that offer more comprehensive insights. NeoGenomics, specializing in cancer genetics, directly competes with Myriad's oncology offerings. Myriad's broader hereditary cancer panels and its new AI-enabled prostate cancer solutions aim to provide more integrated and differentiated solutions.

Myriad's strategic partnerships, such as those with SOPHiA GENETICS (SOPH) for liquid biopsy CDx development and PATHOMIQ for AI-enabled prostate cancer testing, are crucial for expanding its portfolio and accelerating market entry in high-growth segments. These collaborations allow Myriad to leverage external innovation and expertise, complementing its in-house capabilities and enabling it to compete more effectively against larger, more diversified players. The company's focus on EMR integrations and breast cancer risk assessment programs also enhances its competitive standing by improving customer workflow and patient identification, thereby driving volume growth in the unaffected hereditary cancer market.

Financial Performance and Operational Discipline

Myriad Genetics reported Q3 2025 revenue of $205.7 million, a 4% decrease year-over-year. However, when excluding specific headwinds—namely the $8.6 million in prior period revenue recognized in Q3 2024 that did not recur, the $9 million impact from UnitedHealthcare's GeneSight policy change, and the divestiture of the European EndoPredict business—the underlying business demonstrated a 5% year-over-year growth. This adjusted view provides a clearer picture of the company's operational momentum.

The company maintained a strong adjusted gross margin of 70.1% in Q3 2025, reflecting a favorable test mix and continued operational efficiencies in its laboratories. Adjusted operating expenses decreased by $1 million year-over-year, underscoring disciplined cost management. Myriad generated $10.3 million in adjusted EBITDA and $18.6 million in adjusted free cash flow in the third quarter. The robust free cash flow was attributed to the timing of payer collections, a level not expected to repeat in Q4.

For the nine months ended September 30, 2025, revenue decreased by $12.3 million to $614.7 million. This was primarily due to the significant prior period revenue recognition in 2024 and the UnitedHealthcare GeneSight impact, partially offset by increased Hereditary Cancer volumes. Notably, Pharmacogenomics revenue declined by $22.1 million, largely due to a 21% decrease in average revenue per test from the UnitedHealthcare policy. Tumor Profiling revenue decreased by $4.9 million due to the EndoPredict divestiture. Conversely, Prenatal revenue increased by $9.2 million, driven by an 11% increase in average revenue per test, despite a 4% volume decline, mainly from SneakPeek. Hereditary Cancer revenue grew by $5.5 million, supported by a 6% volume increase.

A significant non-cash item impacting GAAP results was the recognition of $316.7 million in goodwill and intangible asset impairment charges during the nine months ended September 30, 2025. This included $234.7 million in goodwill impairment and $82 million in intangible asset impairment, primarily related to the Women's Health and Pharmacogenomics reporting units. These charges were triggered by a sustained decline in market capitalization and downward revisions to forecasts, but management emphasizes they do not represent a meaningful change in the business outlook. The company also recognized an income tax benefit of $28.2 million for the nine months, largely due to the release of unrecognized tax benefits from successful CARES Act tax refund claims.

Liquidity was bolstered in July 2025 with a new $200 million term loan credit facility from OrbiMed, with an initial $125 million drawn at an interest rate of 10.80% as of September 30, 2025. This facility replaced a previous asset-based revolving credit facility and provides Myriad with access to $220 million in capital, ensuring sufficient liquidity for at least the next 12 months. As of September 30, 2025, cash and cash equivalents stood at $145.4 million, and the company was in compliance with all covenants under the new credit agreement.

Outlook and Strategic Trajectory

Myriad Genetics has reaffirmed its full-year 2025 financial guidance, projecting revenue between $818 million and $828 million, adjusted gross margin between 69.5% and 70%, and adjusted operating expenses between $562 million and $568 million. Adjusted EBITDA is expected to range from $27 million to $33 million, with adjusted EPS between a loss of $0.02 and a gain of $0.02. This guidance reflects the ongoing impact of the UnitedHealthcare GeneSight policy and the slower-than-anticipated ramp-up of certain initiatives in unaffected hereditary cancer testing.

The company's strategic plan, centered on the Cancer Care Continuum, aims to deliver high single-digit to low double-digit revenue growth and increased profitability over the next five years. This will be driven by:

• Cancer Care Continuum Acceleration: The launch of the expanded MyRisk test in November 2025 is expected to support strong growth. The ultrasensitive Precise MRD test is on track for clinical use in the first half of 2026, targeting Stage II/III breast cancer. The AI-enabled Prolaris prostate cancer test, a result of the PATHOMIQ partnership, is also slated for launch in the first half of 2026. Myriad is investing over $35 million in a multi-year program to strengthen commercial capabilities, expanding its sales force and increasing funding for new product launches and MRD R&D.
• Prenatal and Mental Health Growth: The commercial launch of the FirstGene multiple prenatal screen in 2026 is anticipated to expand the prenatal market. For GeneSight, the company expects continued revenue growth by focusing on high-value accounts and leveraging state biomarker laws, which have already secured positive coverage in 9 states in 2025.
• Sustained Profitable Growth: Myriad is committed to growing revenue faster than operating expenses through financial discipline, organizational redesign, and enhanced execution rigor.

Management anticipates a reacceleration of volume growth in the second half of 2025, particularly in unaffected hereditary cancer testing, as EMR integration challenges are resolved and breast cancer risk assessment programs scale up. Positive trends in payer coverage for expanded carrier screening and GeneSight, driven by biomarker laws, are expected to continue.

Investment Risks and Considerations

While Myriad Genetics presents a compelling investment thesis, several risks warrant careful consideration. The ongoing impact of UnitedHealthcare's policy change on GeneSight coverage is a significant headwind, expected to continue negatively affecting Pharmacogenomics revenue and profitability. Although Myriad is submitting additional data and engaging with UnitedHealthcare, the outcome remains uncertain.

Operational challenges, such as slower-than-expected EMR integrations for unaffected hereditary cancer testing and past issues with prenatal order management systems, highlight execution risks. While these are being addressed, their full resolution and impact on volume growth may take time. The company's ability to attract and retain qualified personnel, particularly in a competitive life sciences talent market, is also critical for executing its strategic plan.

Furthermore, the company faces inherent risks from increased competition, potential changes in FDA regulation of laboratory-developed tests (LDTs), and broader healthcare policy shifts that could impact reimbursement rates or coverage. The recent goodwill and intangible asset impairment charges, while non-cash, reflect a significant decline in market capitalization and underscore the importance of successful strategy execution to restore investor confidence and valuation. Litigation, including the Qui Tam lawsuit, also presents a potential financial and reputational risk.

Conclusion

Myriad Genetics stands at a pivotal juncture, strategically repositioning itself for accelerated profitable growth within the dynamic precision diagnostics market. The company's renewed focus on the Cancer Care Continuum, underpinned by its "gold standard" hereditary cancer tests, innovative ultra-sensitive MRD technology, and strategic AI partnerships for prostate cancer, forms the core of its investment thesis. By leveraging its differentiated technological capabilities and established market presence, Myriad aims to expand its portfolio into high-growth segments and deliver comprehensive solutions across the patient journey.

Despite recent financial headwinds, particularly from the UnitedHealthcare GeneSight policy and operational adjustments, Myriad's underlying business shows resilience with strong gross margins and positive adjusted EBITDA. The company's reaffirmed 2025 guidance and long-term targets signal confidence in its ability to execute its refined strategy, driven by a robust pipeline of new product launches and a commitment to operational excellence. Investors should closely monitor the successful commercialization of these new offerings, the resolution of EMR integration challenges, and the ongoing efforts to secure favorable reimbursement policies, as these will be critical indicators of Myriad's trajectory towards sustained growth and enhanced shareholder value.