August 13, 2013 / 8:42 PM / 4 years ago

UPDATE 2-Myriad Genetics forecasts full-year profit above estimates

* Sees earnings/shr $1.87-$1.94 for year ending June 2014 vs est $1.86

* Sees full-year revenue $690 mln-$710 mln vs est $665.2 mln

* Fourth-quarter earnings/share 53 cents vs est 44 cents

* Fourth-quarter rev $174.1 mln vs est $159.9 mln

* Shares up 5 pct after market (Adds conference call details, analyst comment)

By Vrinda Manocha

Aug 13 (Reuters) - Molecular diagnostics company Myriad Genetics Inc forecast full-year results ahead of market estimates after reporting a better-than-expected quarterly profit, helped by higher sales of its breast and ovarian cancer detection test.

Myriad shares rose 5 percent in extended trading.

Myriad said it would launch three new tests to detect hereditary cancer, melanoma and lung cancer in the year ending June 2014. The hereditary cancer test will be launched in September.

The company said it expects a profit of $1.87-$1.94 per share on revenue of $690 million to $710 million, including about $665 million-$685 million from its molecular diagnostics business.

Analysts on average were expecting earnings of $1.86 per share on revenue of $665.2 million, according to Thomson Reuters I/B/E/S.

“This (forecast) is likely to indicate confidence in limited competitive impact on BRACAnalysis and continued volume growth,” RBC Capital Markets analyst Michael Yee wrote in a note.

Sales of Myriad’s BRACAnalysis test, which looks for two genes linked to hereditary breast and ovarian cancer, shot up after actor Angeline Jolie declared she had a double mastectomy following a test determining she ran a risk of developing breast cancer.

Myriad said “celebrity publicity” contributed $7 million-$9 million to its fourth-quarter revenue, but the heightened awareness would wane by the end of the current quarter.

The test generated revenue of $129.6 million in the fourth quarter. Total revenue rose 31 percent to $174.1 million.

Net income rose to $44.1 million, or 53 cents per share, in the quarter ended June 30 from $29.1 million, or 34 cents per share, a year earlier.

Analysts expected earnings of 44 cents per share on revenue of $159.9 million

In June, Myriad won a partial victory in a controversial lawsuit that challenged the validity of the company’s patents over two genes linked to hereditary breast and ovarian cancer.

Myriad argued that the patents were valid as it had chemically altered the DNA and the genes were not naturally occurring.

The U.S. Supreme Court ruled that human genes cannot be patented unless they are produced synthetically. Industry analysts had said at the time that the company’s most important patents had been upheld, protecting its BRACAnalysis test.

However, potential competitors such as Quest Diagnostics said they would market tests based on the genes.

William Blair analyst Amanda Murphy said the company had an advantage over competitors as they have an advanced database of gene mutations.

“They talked about incorporating increased competition into their guidance, but they are still guiding towards 13 to 16 percent revenue growth,” she said. (Reporting By Vrinda Manocha in Bangalore; Editing by Sreejiraj Eluvangal and Joyjeet Das)

Our Standards:The Thomson Reuters Trust Principles.
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