Myriad Genetics Inc. (NASDAQ:MYGN), a leader in molecular diagnostics and precision medicine, has reached a settlement in a series of shareholder derivative lawsuits, as disclosed in a recent 8-K filing with the U.S. Securities and Exchange Commission. The Salt Lake City-based company faced allegations that certain current and former directors and officers breached their fiduciary duties and engaged in other misconduct.
The legal proceedings began in August 2021, with the filing of two shareholder derivative complaints in the Delaware Court of Chancery. These cases were consolidated in March 2022. A similar lawsuit was also filed in the United States District Court for the District of Delaware.
Under the terms of the settlement, approved by the court today, Myriad Genetics will implement specified corporate governance reforms. Additionally, the company has agreed to pay up to $950,000 in attorneys' fees and expenses, without admitting any liability or wrongdoing.
The settlement's approval by the Court of Chancery of the State of Delaware effectively dismisses the consolidated derivative action with prejudice. It also stipulates that the plaintiff in the federal derivative action must file the settlement approval and dismissal order and seek dismissal of that case as well.
In other recent news, Myriad Genetics reported an 11% year-over-year revenue growth and a positive adjusted earnings per share (EPS) in its third-quarter 2024 earnings call. The company has adjusted its revenue target for 2024 to approximately $840 million and increased its EPS target to $0.12-$0.14.
Scotiabank (TSX:BNS) revised the price target for Myriad Genetics, citing potential risks from UnitedHealth Group (NYSE:UNH)'s policy change, which may cease coverage of Myriad Genetics' GeneSight testing from 2025. This policy change could result in an approximately $40 million annualized revenue impact for Myriad Genetics.
Despite this, the company remains focused on achieving approximately 12% revenue compound annual growth rate (CAGR) through 2026. In addition, the company plans to launch the Precise MRD test for breast cancer in the first half of 2026 and has made significant investments in lab technologies, including EMR system integrations. These recent developments have been actively addressed by CEO Paul Diaz and Senior VP Matt Scalo, who are engaging with UnitedHealthcare and other stakeholders.
InvestingPro Insights
As Myriad Genetics (NASDAQ:MYGN) closes this legal chapter, investors may find additional context in recent financial data and expert insights. According to InvestingPro, MYGN's stock has experienced significant volatility, with a 43.18% price decline over the past three months. This downturn aligns with the company's recent legal challenges and may reflect market uncertainty surrounding the settlement's impact.
Despite these headwinds, InvestingPro Tips highlight that analysts predict MYGN will return to profitability this year, potentially signaling a turnaround following the resolution of legal issues. The company's revenue growth of 12.15% over the last twelve months also suggests underlying business strength, which could support recovery efforts post-settlement.
For investors seeking a deeper understanding of MYGN's financial health and market position, InvestingPro offers 8 additional tips, providing a more comprehensive analysis of the company's prospects in light of recent events.
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