Friday, August 4, 2023

Brief Blog: Myriad Settles Shareholder Lawsuit for $77.5M

Recently, we noted Exact Sciences settlements (1) with a former CMS contractor medical director for about $14M (here) and (2) on date of service for about $32M (here), the latter being a legacy Genomic Health case.

What's New - Myriad, $77M per Genomeweb

On August 4, 2023, Genomeweb reports a Myriad Genetics shareholder litigation settlement for $77M - here.   Genomeweb initially traced this case back to a 2018 article related to an earlier shareholder action and in a revision, Genomeweb directly cites a 2019 case [styled as Silverman et al. filed by Harper Law).   Genomeweb also notes a 2019 settlement of a different matter (qui tam with a former CMS contractor medical director) for $9M.

MYGN has a market cap of $1.6B and share price this year has moved from around $16 to $23, currently $19.  Five-year highs have been between about $35 and $45.   In the past several years, revenue has run in the $650M to $700M range, COGS around $190M-200M, and operating income around $-100M to $-190M.


In June 2023, Turna Ray of Genomeweb published a deep dive 5000 word article on gene patents and diagnostics I.P. since 2013 - here.


Myriad settlement mentioned on August 3 call.

We have agreed to settle a shareholder lawsuit subject to quarter approval related to a number of alleged misrepresentation and disclosure items from 2019 and for a total of $77.5 million. We will pay $20 million of the settlement in cash next quarter -- this quarter, leaving the remaining $57.5 million to be paid in early 2024 with either cash or equity. We expect the ultimate payment to be more weighted towards cash rather than stock. For example, if we were to pay an additional $30 million with cash, the remaining $27.5 million would then be paid in Myriad's stock, which assuming a $21 price per share would translate to approximately 1.3 million shares or 1.5% of total shares outstanding. Ultimately, we have allowed ourselves significant financial flexibility in how we choose to settle the final payment out of operating cash flows and available cash but we will continue to evaluate various financing options, including the expansion of our ABL credit facility as the year progresses.