Ahead of the Bell: Myriad Genetics rises
Shares of Myriad Genetics jumped in premarket trading Wednesday after the company reported better-than-expected results and announced the acquisition of Crescendo Bioscience, a molecular diagnostics lab.
Based in San Francisco, Crescendo focuses on the market for inflammatory and autoimmune diseases, particularly rheumatoid arthritis.
Myriad said the $270 million cash deal will be reduced by $25 million for the repayment of a loan to Crescendo. The transaction is expected to close by July, subject to regulatory approvals.
Brandon Couillard of Jefferies said the acquisition wasn't a surprise as Myriad had an option to buy Crescendo. Still, the analyst said in a research note the deal helps diversify Myriad's business, and he estimated that Crescendo could add $180 million in revenue by fiscal 2017.
Separately, the Salt Lake City company said it earned $50.4 million, or 66 cents per share, in its fiscal second quarter ended in December. That's up 44 percent from $35 million, or 42 cents per share, a year earlier. Revenue rose 37 percent to $204.1 million, reflecting a 39 percent bump in its molecular diagnostics testing revenue.
Myriad Genetics makes the BRACAnalysis test that can confirm the presence of mutations in two genes responsible for some hereditary breast and ovarian cancers.
Analysts expected earnings per share of 46 cents on revenue of $175.2 million, according to FactSet.
Looking ahead, Myriad increased its fiscal-year outlook and now expected to earn $2.09 to $2.12 per share, up from a prior range of $1.92 to $1.97. Its revenue is now seen in a range of $740 million to $750 million, versus a prior estimate of $700 million to $715 million. Analysts expect $1.98 per share on revenue of $704.1 million, on average.
In premarket trading, shares of Myriad added nearly 12 percent, or $3.20, to $30.38. Its shares are little changed from a year ago.