Myriad Genetics just announced a seemingly simple reorganization of their European operations. They're selling off EndoPredict and licensing Prolaris to Eurobio Scientific. On the surface, it looks like a streamlining effort, a company tightening its belt in a challenging market. But what if this move is far more strategic, a stealthy chess move positioning Myriad to dominate the US precision medicine market?

Myriad's CEO, Paul Diaz, casually dropped a hint during the Q1 2024 earnings call. He described the essential precision medicine tools needed by oncologists treating patients with breast cancer and other cancers. First on the list was hereditary cancer testing, then somatic testing, followed by liquid biopsy, and finally the exciting new technology of MRD testing. Diaz highlighted Myriad's upcoming presence at ASCO, where they will showcase their ability to offer these 'primary key tools' in one integrated platform. This consolidation, he believes, will be a key differentiator, allowing them to offer a unified, EMR-integrated experience that no competitor can match.

The European divestment, in this light, takes on new meaning. By shedding the complexity and expense of the European market, Myriad is freeing up resources to double down on the US. They are laser-focused on building an ecosystem of interconnected precision oncology tools, creating a one-stop shop for oncologists seeking to deliver the best possible care.

This hypothesis is supported by their recent acquisition of Intermountain Precision Genomics, bringing Precise Tumor and Precise Liquid in-house. This move allows Myriad to capture 100% of the economics of these tests and seamlessly integrate them into their unified platform. The focus on integration is further emphasized by their aggressive EMR integration strategy, aiming to add 1,900 locations in 2024, building on the 1,200 they successfully added in 2023.

The numbers tell a compelling story. Myriad reported 12% year-over-year revenue growth in Q1 2024, driven by strong volume growth and ASP improvements. Notably, they achieved positive adjusted EBITDA and were close to breakeven on an adjusted EPS basis. These strong results underscore their commitment to profitable growth, a key factor in their ability to sustain their ambitious strategy.

But the truly revealing data lies in the breakdown of hereditary cancer testing revenue growth. Myriad's oncology team achieved a staggering 20% growth compared to last year, while their women's health team achieved a respectable 12%. This disparity suggests a deliberate strategy: they are aggressively targeting the oncology market with their hereditary cancer testing, positioning it as the cornerstone of their precision oncology solutions platform.

Hereditary Cancer Testing Revenue Growth

The following chart, based on Myriad Genetics' Q1 2024 earnings call, shows the year-over-year revenue growth in hereditary cancer testing, broken down by Myriad's oncology and women's health teams. This data highlights Myriad's strategic focus on the oncology market.

This strategic focus on the oncology market is a shrewd move. The oncology market is rapidly expanding, driven by an aging population and increasing cancer incidence. Moreover, oncologists are increasingly adopting precision medicine approaches, recognizing their potential to improve patient outcomes.

By positioning themselves as the leading provider of integrated precision oncology solutions, Myriad is poised to capture a significant share of this lucrative market. They are building a moat around their business, making it difficult for competitors to match their comprehensive offering and integrated platform.

Further solidifying their strategic advantage is their proactive approach to the FDA's final rule on Lab Developed Tests (LDTs). While some in the industry have expressed concerns, Myriad views the rule as a positive development. Their existing tests already meet CAP/CLIA and New York State requirements, and they have a strong history of compliance with FDA quality standards. They see the rule as a potential competitive differentiator, setting them apart from smaller, less compliant labs.

The European divestment, then, is not a sign of retreat but a strategic realignment. Myriad is shedding non-core assets to focus on what they believe is a far larger and more lucrative opportunity: dominating the US precision medicine market with a comprehensive, integrated platform that no competitor can match.

Time will tell if this stealthy bet will pay off. But the early signs are promising. Myriad is exhibiting a level of strategic focus and disciplined execution that has been absent for years. They are investing in the right areas, building the right partnerships, and generating the right kind of growth. Their European exit may be the quiet opening move in a much larger game, a game they are playing to win.

"Fun Fact: The term 'precision medicine' was first coined in 2011 by the National Research Council. Precision medicine aims to tailor medical treatment to the individual characteristics of each patient, including their genes, environment, and lifestyle."