MYGN Myriad Genetics 10-Q 2026-09-30 section summaries

Myriad Genetics — Q3 and nine months ended September 30, 2026

Consolidated results

Revenue declined 1.5% in Q3 and 3.4% in 9M. Higher Q3 cost of revenue and sales and marketing expense contributed to the wider quarterly operating loss. The much smaller 9M operating and net losses primarily reflect the prior-year period’s $316.7M goodwill and long-lived asset impairment charges; 9M 2026 impairment was $5.4M, including a $4.5M goodwill impairment. The prior-year 9M tax benefit was $28.2M, including a $29.6M discrete benefit associated with successful refund claims; 9M 2026 tax expense was $0.9M.

Revenue categories

Myriad reports one operating segment; its revenue categories provide the principal business-line detail.

Cancer Care Continuum grew 1.1% in Q3 but declined 2.1% for 9M; Mental Health grew 2.1% in Q3 compared with 6.6% for 9M. Prenatal Health revenue declined 11.7% in Q3. The company attributed revenue uncertainty to factors including payer mix, collections, coverage policies, disputes, denials and refunds. During 9M, it reduced revenue by $10.3M for updated estimates on tests delivered in prior periods. Accrued refunds payable and reserves were $24.6M, up from $19.9M.

Cash flow

Stock-based compensation was $22.9M versus $32.4M. Cash paid for interest was $10.0M versus $4.9M. Net cash paid for income taxes was negative $9.6M (a net refund), versus $0.9M paid; the 2026 amount included $11.7M of Q1 refunds relating to a prior-year claim.

Balance sheet, debt and shares

Intangible assets comprised developed technologies of $103.5M, internal-use software of $18.5M, trademarks of $0.3M, licensed technologies of $4.2M and internal-use software in-process of $5.3M. Tangible common equity, calculated as equity less goodwill and intangible assets, was $90.1M. Cash and restricted cash together were $107.8M at September 30, 2026, versus $154.8M at September 30, 2025.

A sustained Q1 share-price and market-capitalization decline triggered an interim goodwill test. Myriad impaired all goodwill assigned to Women’s Health, reducing that reporting unit’s goodwill to zero; the valuation used Level 3 inputs, including a 17% risk-adjusted discount rate. Remaining goodwill was $29.8M for Mental Health and $17.3M for International.

The July 2025 credit facility provides a $125.0M funded term loan and up to $75.0M of delayed-draw loans through June 30, 2027. Borrowings bear interest at one-month SOFR (2.5% floor) plus 6.5%; the rate was 10.2% at September 30, 2026. The facility matures July 31, 2030, is secured by substantially all company and certain subsidiary assets, and includes exit fees and potential repayment premiums. Scheduled principal payments begin September 30, 2029. Monthly trailing-12-month revenue covenant thresholds rise from $615.0M for December 2025 to $974.0M from December 2029; Myriad reported compliance at September 30, 2026.

Equity compensation and developments

Weighted-average diluted shares were 95.7M in Q3 2026 versus 93.1M, and 94.7M for 9M versus 92.3M; no dilutive shares were included. Anti-dilutive RSUs excluded from EPS totaled 11.0M, compared with 8.2M in the corresponding 2025 periods. Unvested RSUs outstanding increased from 7.1M at year-end 2025 to 11.0M; ending awards had a $6.69 weighted-average grant-date fair value and $43.4M of unrecognized compensation expected to be recognized over 2.2 years. Stock-based compensation expense was $9.2M in Q3 versus $12.2M and $22.9M for 9M versus $32.4M. The 2026 equity plan provides approximately 8.5M shares plus potential recycling of legacy awards; 5.5M shares were available for grant.

On October 19, 2026, Myriad agreed to sell certain Prenatal Health assets and liabilities—including Foresight, Prequel, FirstGene and SneakPeek—to Labcorp for $210M cash plus related inventory value at closing, subject to customary conditions including regulatory approvals. Myriad intends to use net proceeds for general corporate purposes, potentially including debt repayment, operations and investment in Cancer Care Continuum; repayment may trigger a premium and exit fee.

The EndoPredict patent case remains ongoing: the Unified Patent Court ruled in December 2025 that the test did not infringe and the patent was invalid; GXD appealed, with a hearing in October 2026 and a decision expected around year-end. Myriad sold EndoPredict to Eurobio in 2024 and agreed, subject to terms, to indemnify the buyer for certain losses. The False Claims Act qui tam litigation also continues; the court denied most of Myriad’s motion to dismiss in July 2026. The company reported no material accrual for legal contingencies, while warning adverse outcomes could have a material effect.

Myriad Genetics (MYGN) — Q3 and first nine months of 2026

Results

Revenue declined 1.5% in Q3 and 3.4% for 9M. Total test volume fell 2% to 377K in Q3 (from 386K) and 1% to 1.141M for 9M (from 1.155M). The 9M revenue decline included a $10.3M reduction from revised estimates of cash collections for tests performed in prior periods.

Cancer Care Continuum revenue rose modestly in Q3 as volume grew 4% to 98K, partly offset by a 3% decline in revenue per test. For 9M, revenue was $358.2M versus $365.8M: volume increased 7% to 289K, but revenue per test fell 9%, primarily due to lower reimbursement. Mental Health revenue grew with Q3 volume up 3% to 141K; 9M revenue was $114.6M versus $107.5M, on 5% volume growth to 417K and 2% higher revenue per test, despite an unfavorable aged-order estimate impact. Prenatal Health was the principal source of the decline: Q3 volume fell 11% to 138K, and 9M revenue was $121.0M versus $141.4M, with volume down 11% to 435K and revenue per test down 4%, primarily reflecting lower reimbursement.

Cost of revenue rose to 32.1% of revenue in Q3 from 30.1%, and to 32.2% for 9M from 30.1%, reflecting personnel costs and, for 9M, laboratory costs. Q3 sales and marketing increased 18%: personnel costs were up $10.6M and marketing and other sales activities up $2.4M. For 9M, the 13% increase included $15.9M more personnel costs and $10.3M more marketing and sales activity. G&A declined 7% for 9M as personnel, rent and amortization savings more than offset $6.5M of higher professional fees for efficiency, productivity and scalability initiatives. R&D expense declined in both periods.

Nine-month goodwill and long-lived-asset impairment charges were $5.4M, compared with $316.7M in 2025, including $234.7M of goodwill and $82.0M of intangible-asset impairments for Women’s Health and Mental Health. Higher 9M other expense primarily reflected interest on the term loan secured in July 2025. The prior-year 9M tax benefit included a $29.6M discrete benefit from release or remeasurement of unrecognized tax benefits. Valuation allowances on deferred tax assets, reflecting cumulative losses and limited expected taxable income, affected tax rates in both periods.

Cash flow and liquidity

Cash and cash equivalents were $107.1M at September 30, 2026, down $42.5M from $149.6M at December 31, 2025. The decline primarily reflected $30.5M of operating cash use and $11.8M for capital expenditures and capitalized intangible assets. Operating cash use worsened by $21.7M year over year, mainly due to lower gross profit and higher commercial-organization investment, partly offset by favorable working-capital changes. Lower capitalization of internally developed software drove the reduction in investing cash use. Financing cash flow compared with $72.4M provided in 9M 2025, when Myriad borrowed $76.1M under its previous revolving facility.

Credit facility, strategy and risks

The July 2025 credit agreement provides a $200.0M term-loan facility: $125.0M funded at closing and up to $75.0M of delayed-draw loans available, subject to terms, through June 30, 2027. The loan matures July 31, 2030; its interest rate is one-month SOFR (subject to a 2.5% floor) plus 6.5%, and was 10.2% at September 30, 2026. Undrawn delayed-draw commitments incur a 0.5% annual fee through June 30, 2027. Debt discounts and issuance costs were $9.4M. Scheduled principal payments begin September 30, 2029; the facility also includes an accrued exit fee and a premium on voluntary prepayments. It is guaranteed by certain material subsidiaries and secured by substantially all assets of Myriad and those guarantors. Certain debt proceeds, asset sales and casualty proceeds can trigger mandatory prepayment.

Covenants include a minimum trailing-12-month revenue test, rising from $615.0M at December 31, 2025 to $974.0M beginning December 31, 2029, and restrictions on debt, liens, asset sales and other activities. Myriad reported compliance at September 30, 2026; a breach could accelerate obligations.

In October 2026, Myriad agreed to sell specified Prenatal Health assets and liabilities—including Foresight, Prequel, FirstGene and SneakPeek—to Laboratory Corporation of America for $210M plus related inventory value at closing. The transaction, expected to close by early 2027 subject to customary conditions including regulatory approvals, is not restricted by the credit agreement and does not require lender consent. Proceeds are intended for general corporate purposes, potentially including debt repayment, operations and Cancer Care Continuum investment. The agreement and sale remain subject to execution, timing, retained-liability and benefit-realization risks.

Myriad prioritizes profitable growth through Cancer Care Continuum testing, Mental Health growth and financial and operational discipline; it identifies organic R&D and new-product development as its preferred return-on-invested-capital strategy. FirstGene Multiple Prenatal Screen launched in July 2026, and in October the company announced a collaboration with SOPHiA GENETICS to advance prostate genomic instability score technology with AstraZeneca.

Management believes current capital resources can support projected operating needs for at least 12 months, but warns that faster cash use, lower operating cash generation, unavailable facility capacity or difficulty obtaining acceptable financing could require cuts or delays to commercial, R&D, operational or test-development plans. Reimbursement restrictions and lower rates, competition, commercialization and execution risks, laboratory and regulatory issues, intellectual-property and cybersecurity risks, and credit-covenant constraints also threaten growth and profitability. Myriad reported no material inflation impact in the periods, but higher inflation or tariff costs that cannot be passed to customers could pressure results.

Market risk

• Foreign exchange: For the nine months ended September 30, 2026, approximately 4% of revenue was denominated in currencies other than the U.S. dollar, primarily Japanese yen. A hypothetical 10% movement in the yen against the dollar would change revenue by less than 0.4%. Expenses are predominantly U.S.-dollar denominated, though certain service-provider agreements also create foreign-currency exposure. Myriad does not use foreign-exchange hedges.
• Interest rates: Exposure is primarily to the variable-rate, SOFR-based Credit Facility. At a facility balance of $125.0 million, a 100-basis-point change in interest rates would increase or decrease annual interest expense by $1.3 million.

As of September 30, 2026, the CEO and CFO concluded that disclosure controls and procedures were effective in providing reasonable assurance that required information was recorded, processed, summarized, reported on time, and communicated to management. No changes during the quarter ended September 30, 2026 materially affected, or were reasonably likely to materially affect, internal control over financial reporting.

Risk Factors

MYGN reported no material changes to its previously disclosed risk factors, except for risks associated with the planned sale of its Prenatal Health business.

Planned sale and closing risks

On October 19, 2026, MYGN agreed to sell certain Prenatal Health assets and liabilities to Laboratory Corporation of America for $210 million in cash, plus the value of related inventory at closing. Completion is subject to customary conditions, including federal antitrust and applicable state health care regulatory clearances. Regulators could delay, condition or block the transaction. Either party may terminate if the sale has not closed by February 19, 2027; specified circumstances allow an automatic extension to October 19, 2027. In certain cases, the buyer may owe MYGN a $10.5 million termination fee if required regulatory clearances are not obtained.

If the sale does not close, MYGN could lose the expected proceeds after incurring transaction costs and diverting management resources, and may be unable to operate the business as it did before the announcement. Interim operating restrictions, disruption to employee, provider, payor and supplier relationships, and litigation could also impair or delay the transaction.

Risks if the sale is completed

The divestiture would eliminate Prenatal Health revenue and cash flow. MYGN may not replace them through growth in its remaining businesses or reduce shared costs and expenses quickly enough to offset the loss. Transition services could use resources, generate unreimbursed costs or disrupt the remaining operations.

MYGN will retain certain Prenatal-related liabilities, including pre-closing billing, coding and reimbursement liabilities, and has agreed to indemnify the buyer for specified losses. The buyer’s representation and warranty insurance does not eliminate MYGN’s potential exposure. Inventory-based purchase-price adjustments, transaction expenses, taxes, indemnification payments and retained liabilities could reduce net proceeds and the expected benefits of the sale.

Use of proceeds and debt covenant

MYGN intends to use net proceeds for general corporate purposes, potentially including repayment of some or all Credit Facility loans, funding operations and investment in its Cancer Care Continuum business. Repaying debt could leave fewer funds available for operations and investment.

After the sale, the Credit Agreement’s trailing-12-month revenue covenant would remain in effect against an expected lower revenue base. Failure to comply would constitute a default and could make all outstanding Credit Facility borrowings immediately due.

For the quarter ended September 30, 2026, none of MYGN’s directors or executive officers adopted, modified, or terminated a Rule 10b5-1(c) trading plan or a non-Rule 10b5-1 trading arrangement. This section reports no financial results or other business developments.