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Myriad Genetics (MYGN) PT Lifted By Oppenheimer After Q3, 'Perform' Maintained

 May 02, 2012 12:54 PM

(By Balaseshan) Oppenheimer & Co. analyst David Ferreiro raised his price target on shares of Myriad Genetics Inc. (NASDAQ:MYGN) to $29 from $22, while maintaining "Perform" rating given the uncertainty around the impact of CPT coding reform.

After the company's third quarter results, the brokerage increased its 2012 EPS estimate to $1.29 from $1.26 and its 2013 estimate to $1.43 from $1.38. The firm cut its 2012 revenue estimate to $493.5 million from $469.4 million and its 2013 estimate to $553.3 million from $486.0 million.

The company's Q3 revenue of $129.8 million was above Ferreiro's estimate of $116 million and Street estimate of $120 million. This translated to EPS of $0.34 (up 11% year-over-year growth) above his estimate of $0.31 and the Street's forecast of $0.32. On the quarter, MYGN repurchased 502,000 shares ($161 million remaining on $200 million authorization).

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Third quarter revenue growth of 27% (21% organic) was driven by BRACAnalysis growth in new indications and the emergence of Colaris. Progress with MYGN's European expansion plan remains ahead of schedule with European labs open and accepting samples.

As expected, MYGN has stepped up the commercialization efforts for Prolaris, securing the publication of a clinical study (Pro-003) and plans to increase the sales force to 20. In total MYGN will have tested Prolaris in 3,500 patients across 9 studies. Ferreiro is encouraged by the company's progress, both commercially and on the developmental front.

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MYGN has nine clinical trials underway, with PRO-009 studying 450 radical prostatectomy patients and expected publication in 2013. Upon completion, Prolaris will have been tested in about 3,500 patients. With a doubling of the sales force and payor talks underway, the analyst expects Prolaris to start making a material impact by 2014.

MYGN has raised guidance to revenue of $492 million to $496 million versus previous guidance of $445 million to $465 million. This translates to earnings of $1.29 to $1.31 per share range versus the original estimate of $1.20 to $1.25 per share.

Myriad Genetics, which is a molecular diagnostic company, is focused on developing and marketing predictive medicine, personalized medicine and prognostic medicine tests. It performs all of the molecular diagnostic testing and analysis for its tests in its own reference laboratory.

MYGN is trading up 2.04% at $26.50 on Wednesday.

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