Myriad Genetics (NASDAQ:MYGN) is a developer of diagnostic medical products, with a focus on cancer testing to help identify patients who are most at risk due to their genetics.

Diagnostics are perhaps not quite as sexy as the exciting rollercoaster ride that is drug development. But MYGN has some exciting things brewing in the pot. Today, I want to take a look with you regarding their recent performance, and then I want to share some thoughts on where their growing platform for prostate cancer assessment is going.

First, some financial considerations

The company's portfolio and ongoing development of therapies and diagnostic tools are supported by the successful launch and commercialization of its hereditary cancer platform.

In fact, according to the latest quarterly filings from the company, this suite of products brought in $140 million in Q1 2017. Overall, the company remains in the black with operating income of roughly $13 million in the first quarter.

While it's not bad to be in the black, this is a further decline in total net income from the same period in 2016, which saw over $40 million in net operating income. This is due in large part to an ever-expanding field of competitors in the diagnostic space.

Thus, MYGN needs to have success in other areas if they are to continue growing. And its field of cancer-specific diagnostic tests seems to be an important area of growth for the company.

Myriad bringing it in force at the Urologic Meeting

To date, MYGN's Prolaris platform, which helps to assess risk of relapse in men with prostate cancer, has not fundamentally changed the bottom line for the company. Since its launch in 2010, Prolaris revenue now stands on the order of millions of dollars per quarter, with the most recent filing showing $3.4 million in sales for Q1 2017.

Compare that to Genomic Health's Oncotype DX, which raked in over $10 million in Q1 2016, for something approaching a similar comparison.

The feasibility of growing the Prolaris numbers hinges on being able to firmly establish a benefit for the test. As such, it is with much gusto that MYGN has announced four studies being presented at the American Urological Association 2017 meeting.

They include the following abstracts:

Let's consider each of these, one by one:

Evaluating the Prognostic Utility of the CCP Score for Predicting Prostate Cancer Aggressiveness in African American Men

While Prolaris has shown benefit for predicting prostate cancer outcomes in a number of settings, there's not much information specifically relating to outcomes for African American men. Thus, MYGN undertook a more focused analysis to confirm the utility in this minority population.

The study looked at a cohort of 694 men, 38% of whom were African American. It showed that the Prolaris score distribution did not differ significantly based on race. Furthermore, whereas race did not accurately predict the risk of the development of metastasis, the Prolaris score did in a multivariate analysis.

This suggests that the use of Prolaris can help make more informed decisions without relying on clinicopathologic information.

Prognostic Utility of Biopsy-Derived Cell Cycle Progression Score in Patients with NCCN Low-Risk Prostate Cancer Undergoing Radical Prostatectomy: Implications for Treatment

Information regarding the prognostic value of Prolaris in low-risk disease is also sparse, so MYGN looked at patients who met the national guideline classification for low-risk disease to see the risk of biochemical relapse, as stratified by Prolaris scoring criteria.

Interestingly, three risk groups according to Prolaris results (low, intermediate, high) had five-year BCR-free survival of 89.2%, 80.4%, and 64.7%, respectively, representing a significant predictive power.

These findings suggest that the Prolaris test can provide substantial fine-tuning of the risk classification for patients with prostate cancer who are defined as low risk. It remains to be seen, of course, how doctors would make use of these results, but it will be interesting to see later how predicting the risk of biochemical relapse translates into overall outcome for these patients.

The Impact of Clinical CCP Testing in Men with Localized Prostate Cancer for Expanding the Population of Men Eligible for Active Surveillance

"Active surveillance," the treatment strategy of "wait as long as you can before treating" can be very effective for helping men with prostate cancer avoid treatment-related toxicity while maintaining disease control. However, it is tricky to accurately point out which patients should take this approach.

In this study, samples from over 17,000 men were analyzed and correlated with outcome, defining a population who can forego treatment based on Prolaris score.

The most interesting finding in the study was that a certain proportion of patients who would be classified as "high risk" based on clinical variables had a low enough score that they would be candidates for active surveillance. In the "AUA" high-risk group, 14.1% of men would be good candidates.

This is important for helping to preserve patient quality of life and cost of treatment. If you can safely forego therapy for some extended period of time, that's less treatment burden on the patient. So this could prove to be a useful tool as it gains more validation.

Patient NCCN Risk Classification Based on Combined Clinical Cell Cycle Risk Score

In case it hasn't become clear, using clinical variables (such as Gleason score and NCCN risk criteria) can be a pretty blunt way to assess risk of treatment failure. One of the big goals of molecular diagnostics in numerous fields of treatment is to develop cleaner tools for analysis, especially in these tumors where patients can often expect to live for decades after diagnosis.

In this study, clinicopathologic features were measured against the Prolaris score to assess the risk of death by ten years post diagnosis. A large portion of men in the traditional risk subgroups were reclassified. For example, 25% of the "low-risk" cohort were actually in higher risk of relapse. 47% of those in the "intermediate-risk" population were reclassified, as well.

What this tells us is that, for a strong minority of patients, clinical features alone will give misleading information to doctors as they attempt to formulate an effective treatment plan. Incorporation of Prolaris score into the process can help fine-tune the stratification of risk. While the conclusions for treatment selection are not quite clear, the implication is that doctors will be able to use this information in the future when selecting treatment.

For example, if you're clinically low risk, but your Prolaris score says you might be at higher risk, then the doctor could select a more aggressive treatment strategy for you.

Conclusions

The studies presented at AUA 2017 add more fuel to the engine that MYGN is building up. It remains to be seen whether this will affect uptake of the Prolaris platform in the clinic, but with over 160,000 diagnoses of prostate cancer in the US alone, there is a deep potential market for this diagnostic platform.

If MYGN can continue to demonstrate the benefit of Prolaris in these patients, they should see growth in the platform. The big coups to come will be studies that correlate treatment outcomes with Prolaris score, since this information gives concrete guidance for doctors when selecting treatment. For this reason, the "active surveillance" study might be the most important for the bottom line, as it provides useful information that affects treatment decisions.

Prolaris will be one product to keep an eye on as part of your due diligence for MYGN.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Myriad Genetics Makes A Strong Case For Its Prolaris Test - Seeking Alpha