Myriad Says Denied Claims, Not Lower Contract Rates, Are Dragging Down Hereditary Cancer Test Revenue
The CFO said revenue per test fell because payers pay nothing on more claims, even as Myriad agreed to sell its prenatal unit for $210 million.
Myriad Genetics, which sells genetic tests for cancer risk, prenatal care and psychiatric drug selection, says its hereditary cancer pricing problem is zero-pay claims, not renegotiated contracts. CFO Ben Wheeler said so on the company's Wednesday earnings call, held as Myriad agreed to sell its prenatal business to Labcorp.
Zero pay, not lower rates
Pressed by an analyst at Craig-Hallum on whether the drop in revenue per test reflected lower negotiated rates, Wheeler said the softness is "driven by an increase in zero pay," meaning the company is more often not paid or faces denials. He said it is not a byproduct of contract changes or a change in medical policy.
Asked whether Myriad's price position invites those denials, Wheeler said he did not think so. He pointed to payers managing their budgets by changing prior-authorization requirements or medical-record requests.
CEO Sam Raha said the pattern is not so different from what the wider industry sees. "The longer a test is on the market, the more subject it is to various reimbursement pressures," he said, adding that Myriad has several older tests, so the effect may be more pronounced for it now.
Wheeler framed the long-run decline in hereditary cancer revenue per test as an average of 1% to 5% a year, recently skewing to 3% to 5%. Some years run past 5%, he said, "like this year," and others are flat or down 1%.
A 9% sequential rebound
Third-quarter revenue was $202.7 million, Raha said, down 1% from a year earlier and up 6% from the second quarter, per Wheeler. Hereditary cancer revenue per test rose 9% from the second quarter but remains 6% below a year ago. Raha credited early work on payer engagement and revenue-cycle management.
Gross margin was 67.9%, up 130 basis points from the second quarter. The adjusted EBITDA loss was $5 million and the adjusted loss was 11 cents a share, as in the quarterly results.
Myriad raised the midpoint of its 2026 revenue guidance to $785 million from $780 million, with a range of $780 million to $790 million. Wheeler said the increase reflects about $10 million of third-quarter outperformance, trimmed by roughly $5 million of expected prenatal softness after the deal announcement.
Selling prenatal for $210 million
The Labcorp deal is all cash at $210 million plus inventory, which Raha said values the unit at 1.3 times trailing 12-month revenue. Prenatal revenue was $39 million in the quarter, down 12% from a year earlier, with test volume down 11%.
Wheeler said Myriad ended the quarter with about $182 million in available capital, before the sale proceeds. He said uses under consideration include debt repayment and growth investments inside and outside the company. About 500 employees are set to move to Labcorp.
Management showed that revenue growth should improve by more than 100 basis points after the sale and gross margin by more than 500 basis points. Wheeler said more on 2027 profitability and the Ascend cost initiative will come as the year turns.
Myriad is scheduled to hold fireside chats at the UBS Global Healthcare Conference on November 10.
Sources
- Myriad Genetics Non-GAAP EPS of -$0.11 beats by $0.09 | Seeking Alpha — seekingalpha.com
- Myriad Genetics to Release Third Quarter 2026 Financial Results on November 4, 2026 – Company Announcement - FT.com — Financial Times
- Sophia Genetics Q3 2026 Earnings Call Transcript — benzinga.com
- Myriad Genetics Reports Third Quarter 2026 Financial — globenewswire.com
- Myriad Genetics to Participate in Upcoming Investor — globenewswire.com
