Stock Analysis & Valuation Myriad Genetics, Inc. (0K3W.L)

• Previous Close: £5.48
• Sector Valuation Confidence Level: High

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	19.90	263
Intrinsic value (DCF)	4.22	-23
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Myriad Genetics, Inc. (LSE: 0K3W.L) is a pioneering genetic testing and precision medicine company headquartered in Salt Lake City, Utah. Specializing in molecular diagnostics, Myriad offers a comprehensive portfolio of genetic tests focused on oncology, women's health, and mental health applications. Key products include the MyRisk Hereditary Cancer Test, BRACAnalysis CDx, and MyChoice CDx for oncology, as well as Prequel Prenatal Screen and GeneSight Psychotropic Test for women's and mental health. The company leverages advanced DNA sequencing and RNA expression technologies to provide actionable insights for personalized healthcare. With strategic collaborations with Illumina and Intermountain Precision Genomics, Myriad enhances its capabilities in germline and somatic tumor testing. Founded in 1991, Myriad operates in the rapidly growing precision medicine sector, addressing critical needs in cancer risk assessment, prenatal screening, and mental health treatment optimization.

Investment Summary

Myriad Genetics presents a high-risk, high-reward investment opportunity in the precision medicine space. The company's innovative genetic testing portfolio addresses large and growing markets in oncology and women's health, supported by strong intellectual property and strategic partnerships. However, significant financial challenges persist, including a net loss of $263 million in FY2023 and negative operating cash flow of $111 million. The high beta of 2.016 indicates substantial volatility relative to the market. While the $753 million revenue base demonstrates commercial traction, profitability remains elusive. Investors should weigh the company's technological leadership against its financial sustainability and the competitive pressures in genetic testing.

Competitive Analysis

Myriad Genetics competes in the rapidly evolving genetic testing market, where its primary competitive advantage lies in its comprehensive test menu and established brand in hereditary cancer testing. The company's BRACAnalysis CDx maintains strong positioning as a companion diagnostic for BRCA-related cancers, though it faces increasing competition from broader genomic profiling tests. Myriad's vertical integration of testing services provides control over quality and turnaround time, but this capital-intensive model pressures margins. In prenatal testing, the Prequel screen competes with larger players offering more extensive non-invasive prenatal testing (NIPT) panels. The GeneSight psychotropic test holds a unique position in mental health pharmacogenomics, though payor reimbursement remains challenging. Myriad's collaboration with Illumina strengthens its technological capabilities but doesn't eliminate the threat from companies with more advanced sequencing platforms. The company's relatively small scale compared to some competitors limits its ability to compete on price in commoditized segments of genetic testing.

Major Competitors

• Illumina, Inc. (ILMN): Illumina dominates the sequencing instrumentation market and offers competing genetic tests through its Grail subsidiary. While Myriad collaborates with Illumina on some tests, Illumina's scale and technology leadership pose a long-term threat. Illumina's strength in next-generation sequencing (NGS) platforms gives it cost advantages, but it lacks Myriad's depth in clinical interpretation for hereditary cancer.
• Natera, Inc. (NTRA): Natera is a formidable competitor in prenatal and oncology testing with its Panorama NIPT and Signatera MRD tests. Natera's cell-free DNA technology competes directly with Myriad's Prequel, while Signatera challenges Myriad's tumor profiling tests. Natera has shown stronger revenue growth but faces similar profitability challenges.
• Guardant Health, Inc. (GH): Guardant leads in liquid biopsy for cancer with its Guardant360 test, competing with Myriad's tumor profiling offerings. Guardant's blood-based approach provides convenience advantages over Myriad's tissue-based tests, though Myriad maintains strength in germline testing. Guardant has been more successful in securing companion diagnostic status for its tests.
• Qiagen N.V. (QGEN): Qiagen offers competing molecular diagnostics and bioinformatics solutions, with particular strength in companion diagnostics. While Qiagen has broader geographic reach than Myriad, its test menu is less focused on hereditary cancer. Qiagen's profitability and cash flow position are stronger than Myriad's.
• Exact Sciences Corporation (EXAS): Exact Sciences competes in cancer screening with its Cologuard colorectal test and recently expanded into hereditary cancer testing through acquisitions. Exact's direct-to-consumer marketing capabilities exceed Myriad's, though Myriad has deeper experience in clinical genetics. Exact's larger revenue base provides more R&D resources.