Apples to Apples: Comparing EXACT Sciences to Myriad Genetics
August 15, 2016
By Mark Terry, BioSpace.com Breaking News Staff
There is a very old proverb that goes back to at least the fifteenth century: Comparisons are odious. A more recent one has to do with comparing apples and oranges. With those thoughts in mind, Keith Speights, writing for The Motley Fool, takes a close look and compares Myriad Genetics and EXACT Sciences .
As Speights writes, “Two molecular-diagnostic companies: One is profitable. The other isn’t. One saw its bottom line grow year over year in the most recent quarter. The other saw a decline.”
Myriad is the profitable company with the growing bottom line and Exact Sciences is the other. Which then brings up the fundamental question in Speights’ analysis. Exact Sciences’ has risen from $4.94 on March 1 to a current price of $21.94. Myriad Genetics had a high of $41.16 on November 4, 2015, and a current share price of $21.57.
EXACT Sciences
EXACT Sciences , headquartered in Marlborough, Massachusetts, is a molecular diagnostics company that started on early detection of colorectal cancer. It markets Colorguard, a noninvasive screening test for colorectal cancer that analyzes stool DNA and blood biomarkers.
The company’s revenues have grown more than 160 percent year over year in the last quarter, and almost tripled in the last six months of this year compared to the same period in 2015. That’s primarily related to sales of Colorguard.
Although the company showed a net loss in the second quarter, it was related to increased sales and marketing spending of 47 percent, which is likely directly correlated to the increased revenue. Which makes total sense.
Speights goes on to note that the company expects to create $90 to $100 million in revenue this year, which seems likely. And Wall Street analysts project its bottom line will grow about 22.5 percent at an annual rate over the next five years.
Myriad Genetics
Myriad Genetics , headquartered in Salt Lake City, Utah, is also a molecular diagnostics company, best known for its BRCA1 and 2 tests for inherited breast cancer, although it has been forced to move into other areas after losing a Supreme Court decision over its patents in 2013.
It currently runs six DNA tests for hereditary cancers. myRisk screens for eight types of cancer, breast, ovarian, gastric, colorectal, pancreatic, melanoma, prostate, and endometrial. Its Vectra DA is a blood test for rheumatoid arthritis. And its Prolaris prostate cancer test earned $3.5 million in the last quarter, but is expected to take off soon.
In its fiscal fourth quarter ending June 30, Myriad reported a year-over-year rise of 25 percent for earnings. Its net income was $23.4 million on $186.5 million in revenue last quarter, and is projecting $750 million in sales in the new fiscal year.
The company has also been involved in some acquisitions. It acquired Sividon Diagnostics in May of this year, which included the company’s EndoPredict breast cancer prognostic test. Myriad projects a $600 million global market for the product. And on Aug. 3 it announced it plans to buy Assurex Health, a company that offers genetic testing for psychotropic medicines, and GeneSight, a neuroscience diagnostic test.
What makes Myriad questionable to investors, apparently, is that its 2017 earnings guidance is below expectations. Speights writes, “In fiscal 2016, Myriad racked up earnings of $1.71 per diluted shares. For fiscal 2017, the company expects generally accepted accounting principles (GAAP) earnings of between $0.47 and $0.57 per diluted share.”
Exact Sciences definitely seems on the rise. Speights isn’t quite as confident in Myriad, writing, “While the acquisitions of Assurex and Sividon are good moves in my view, I’m concerned about Myriad’s losing ground to competition with its core hereditary cancer products. Perhaps investors overreacted in the sell-off following the company’s earnings announcement, but I’m not sure.”
On the other hand, it seems likely that the usage of personalized medicine and prognostic genetics-based clinical tests is only going to increase, and although there’s plenty of competition, Myriad is in a pretty good spot in the industry.