Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒x No ☐¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒x

As of ~~May 1,~~November 2, 2020, the registrant had ~~74,554,701~~75,210,480 shares of $0.01 par value common stock outstanding.

~~MYRIAD GENETICS, INC.~~

~~INDEX TO FORM 10-Q~~

Condensed Consolidated Balance Sheets ~~(Unaudited)~~

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss (Unaudited)

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Stockholders’ Equity

See accompanying notes to consolidated financial statements.

Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes to condensed consolidated financial statements.

(Dollars and shares in millions, except per share data)

~~(1)~~

~~BASIS OF PRESENTATION~~

(1)BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements ~~have been prepared by~~for Myriad Genetics, Inc. and subsidiaries (the “Company” or “Myriad”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). ~~The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.~~ All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly all financial statements in accordance with GAAP. The condensed consolidated financial statements herein should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto ~~for the fiscal year ended June 30, 2019,~~ included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019. Operating results for the three and nine months ended March 31, 2020 may not necessarily be indicative of results to be expected for any other interim period or for the full year.~~

The consolidated financial statements include the accounts of the Company’s majority-owned subsidiary, Assurex Canada, Ltd. which is 85% owned by Assurex Health, Inc. (“Assurex”), a wholly owned subsidiary of the Company, and 15% owned by the Centre for Addiction and Mental Health. Assurex Canada, Ltd. is a consolidated subsidiary of Assurex Health, Inc. The value of the non-controlling interest represents the portion of Assurex Canada, Ltd.’s profit or loss and net assets that is not held by Assurex Health, Inc. The Company attributes comprehensive income or loss of the subsidiary between the Company and the non-controlling interest based on the respective ownership interest.

2020.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. ~~Actual~~Operating results ~~could differ~~for the three months ended September 30, 2020 may not necessarily be indicative of results to be expected for any other interim period or for the full year.

The full impact of the COVID-19 outbreak continues to evolve and its future impact remains highly uncertain and unpredictable. As such, it is uncertain as to the full magnitude of the effect that the pandemic will have on the Company's financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on the Company's financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evaluation of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for future periods.

We have historically experienced seasonality in our testing business. The volume of testing is negatively impacted by the summer season, which is generally reflected in the quarter ended June 30. The quarter ending December 31 is generally strong as we see an increase in volumes from ~~those estimates.~~

patients who have met their annual insurance deductible. Conversely, the quarter ending March 31 is typically negatively impacted by the annual reset of patient deductibles. Due to the global pandemic, we cannot predict if seasonality will follow the same pattern as in prior years.

Certain ~~immaterial~~ prior period ~~goodwill impairment charges that were previously classified as part of selling, general and administrative expense in the condensed consolidated statements of operations were~~amounts have been reclassified to conform towith the current period ~~presentation and are included as part of~~presentation. The reclassifications have no impact on the ~~goodwill and intangible asset impairment charges financial statement line item in~~total assets, total liabilities, stockholders’ equity, cash flows from operations, or net loss for the ~~current~~ period.

Recent Accounting Pronouncements

Recently Adopted Standards

In ~~February~~June 2016, the Financial Accounting Standards Board (the ~~“FASB”~~"FASB") issued ASU 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and changing certain lessor accounting requirements. ASU 2016-02 also requires entities to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. On July 1, 2019, the Company adopted ASU 2016-02 under the modified retrospective approach by initially applying ASU 2016-02 at the adoption date, rather than at the beginning of the earliest comparative period presented. Results for the three and nine months ended March 31, 2020 are presented under ASU 2016-02. Prior period amounts were not adjusted and continue to be reported under previous lease accounting guidance.

Under ASU 2016-02, the Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. ROU assets are based on the measurement of the lease liability and also include any lease payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable.

As the implicit rate in the Company's leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. When calculating the Company’s incremental borrowing rates, the Company gives consideration to its credit risk, term of the lease, total lease payments and adjust for the impacts of collateral, as necessary. The lease term used may reflect any option to extend or terminate the lease when it is reasonably certain the Company will exercise such options. Lease expenses for the Company's operating leases are recognized on a straight-line basis over the lease term.

ASU 2016-02 provides a number of optional practical expedients in transitioning to ASU 2016-02. The Company has elected the package of practical expedients to avoid reassessing under ASU 2016-02 prior conclusions about lease identification, lease classification and initial direct costs. The Company has also elected the practical expedient allowing the use of hindsight in

determining the lease term and assessing impairment of right-of-use ROU assets based on all facts and circumstances through the effective date of the new standard. ASU 2016-02 also provides practical expedients for ongoing lease accounting. The Company has elected the recognition exemption for short-term leases for all leases that qualify. Under this exemption, the Company will not recognize ROU assets or lease liabilities for those leases that qualify as a short-term lease (leases with lease terms of 12 months or less), which includes not recognizing ROU assets or lease liabilities for existing short-term leases in transition. The Company also has elected the practical expedient to avoid separating lease and non-lease components for any of its leases within its existing classes of assets.

As of the July 1, 2019 adoption date, the Company recognized operating lease liabilities of $78.8 and right-of-use assets related to operating leases totaling $74.5 as of the adoption date. These are presented as “Current maturities of operating lease liabilities” for a total of $13.1, “Noncurrent operating lease liabilities” for a total of $65.7, and “Operating lease right-of-use assets” for a total of $74.5 on the Company’s consolidated balance sheet. ~~No adjustments to the beginning retained earnings balance were required.~~

On October 1, 2019, the Company early adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) (“ASU 2017-04”) as permitted under the standard. The standard simplifies the accounting for goodwill impairment by requiring a goodwill impairment to be measured using a single step impairment model, whereby the impairment equals the difference between the carrying amount and the fair value of the specified reporting units as a whole. This eliminates the second step of the current impairment model that requires a company to first estimate the fair value of all assets in a reporting unit and measure impairments based on those fair values and a residual measurement approach. The standard also specifies that any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU was adopted on a prospective basis with no material impact to the Company’s consolidated financial statements.

~~Standards Effective in Future Years and Not Yet Adopted~~

~~In June 2016, the FASB~~ issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”) which introduces new guidance for the accounting for credit losses on certain instruments within its scope. ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company ~~will be~~is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable. Credit losses relating to available-for-sale debt securities ~~will~~are also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. On July 1, 2020, the Company adopted ASU 2016-13 ~~is effective for fiscal years~~under the modified retrospective approach by initially applying ASU 2016-13 at the adoption date, rather than at the beginning ~~after December 31, 2019, including interim periods within those years. Early application~~ of the earliest comparative period presented. This guidance ~~is permitted for all entities for fiscal years beginning after December 15, 2018, including~~was adopted with no material impact to the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of ASU 2016-13 on itsCompany's consolidated financial ~~statements~~.

statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, including hosting arrangements that include an internal-use

software license. ~~This guidance~~On July 1, 2020, the Company adopted ASU 2018-15 on a prospective basis with no material impact to the Company's consolidated financial statements as of September 30, 2020. The amounts capitalized may be material in future periods; implementation costs incurred in cloud computing arrangements are capitalized as part of the other assets financial statement line item in the consolidated balance sheets.

Standards Effective in Future Years and Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASC 2019-12 is ~~effective~~a new accounting standard to simplify accounting for ~~public entities~~income taxes and remove, modify, and add to the disclosure requirements of income taxes. The standard is effective for fiscal years beginning after December 15, ~~2019, and for interim periods within those fiscal years,~~2020, with early adoption permitted. The Company is currently evaluating the ~~potential effects of~~impact this ~~guidance~~new standard will have on ~~its~~the consolidated financial statements.

Myriad generates revenue by performing molecular diagnostic testing and pharmaceutical services. The Company previously provided clinical services until selling Privatklinik Dr. Robert Schindlbeck GmbH & Co. KG (the "Clinic") in February 2020. Revenue from the sale of molecular diagnostic tests and pharmaceutical and clinical services is recorded at the estimated amount of consideration to be received. The Company has determined that the communication of test results or the completion of clinical and pharmaceutical services indicates transfer of control for revenue recognition purposes.

The following table presents detail regarding the composition of our total revenue by product and by ~~U.S~~U.S. versus rest of world, “RoW”:

Nine months ended March 31,

2020

2019

(In millions)

U.S.

RoW

Total

U.S.

RoW

Total

Molecular diagnostic revenues:

Hereditary Cancer Testing

$
295.0

$
12.6

$
307.6

$
351.4

$
9.3

$
360.7

GeneSight

65.6

—

65.6

82.8

—

82.8

Prenatal

59.9

0.2

60.1

80.0

—

80.0

Vectra

31.8

—

31.8

36.1

—

36.1

Prolaris

20.0

0.1

20.1

19.1

0.1

19.2

EndoPredict

1.5

6.8

8.3

1.2

6.2

7.4

Other

9.9

0.2

10.1

5.8

0.5

6.3

Total molecular diagnostic revenue

483.7

19.9

503.6

576.4

16.1

592.5

Pharmaceutical and clinical service revenue

26.3

15.5

41.8

25.5

17.7

43.2

Total revenue

$
510.0

$
35.4

$
545.4

$
601.9

$
33.8

$
635.7

The Company performs its obligation under a contract with a customer by processing diagnostic tests and communicating the test results to customers, in exchange for consideration from the customer. The Company has the right to bill its customers upon the completion of performance obligations and thus does not record contract assets. Occasionally, customers make payments prior to the Company's performance of its contractual obligations. When this occurs, the Company records a contract liability as deferred revenue. During fiscal year 2020, the Company received approximately $29.7 in advance Medicare payments to provide relief from the economic impacts of COVID-19 on the Company. The advance Medicare payments are included in the beginning and ending balance of deferred revenue. A reconciliation of the beginning and ending balances of deferred revenue is shown in the table below:

Nine months ended

March 31,

2020

2019

Deferred revenue - beginning balance

$
2.2

$
2.6

Revenue recognized

(2.4
)

(5.9
)
Prepayments

4.0

5.6

Deferred revenue - Ending Balance

$
3.8

$
2.3


	Three months ended September 30,
	2020		2019
Deferred revenue - beginning balance	$	32.8	$	2.2
Revenue recognized	(2.3)		(0.4)
Prepayments	1.8		0.3
Deferred revenue - ending balance	$	32.3	$	2.1

In accordance with ASU 2014-09, the Company has elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its contracts that are one year or less, as the revenue is expected to be recognized within the next year. Furthermore, the Company has elected not to disclose the aggregate amount of the transaction price allocated to remaining performance obligations for its agreements wherein the Company’s right to payment is in an amount that directly corresponds with the value of Company’s performance to date. However, the Company periodically enters into arrangements with customers to provide diagnostic testing and/or pharmaceutical and clinical services that may have terms longer than one year and include multiple performance obligations. As of ~~March 31,~~September 30, 2020, the aggregate amount of the transaction price of such contracts that is allocated to the remaining performance obligations is ~~$4.1.~~

$2.8.

The Company ~~provides discounts such as self-pay and volume~~may provide discounts to its customers. In determining the transaction price, Myriad includes an estimate of the expected amount of consideration as revenue. The Company applies this method consistently for similar contracts when estimating the effect of any uncertainty on an amount of variable consideration to which it will be entitled. The Company applies the expected value method for sales where the Company has a large number of contracts with similar characteristics.

In addition, the Company considers all the information (historical, current, and forecast) that is reasonably available to identify possible consideration amounts. The Company considers the probability of the variable consideration for each possible scenario. The Company also has significant experience with historical discount patterns and uses this experience to estimate transaction prices. The Company excludes from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a ~~customer~~customer. for ~~e.g.~~example, sales tax, value added tax, etc.

When assessing the total consideration for insurance carriers and patients, revenues are further constrained for estimated refunds. The Company reserves certain amounts in accrued liabilities on the balance sheet in anticipation of requests for refunds of payments made previously by insurance carriers, which are accounted for as reductions in revenues in the consolidated statements of operations and comprehensive loss. As of September 30, 2020, the Company recorded a $2.2 accrued liability and corresponding reduction in revenues for future refund of payments.

Cash collections for certain diagnostic tests delivered may differ from rates originally estimated, primarily driven by changes in the estimated transaction price due to contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met and settlements with third party payors. As a result of this new information, the Company updates our estimate of the amounts to be recognized for previously delivered tests, the impact of which was not material to our consolidated statements of operations for the three months ended September 30, 2020.

The Company applies the practical expedient related to costs to obtain or fulfill a contract since the amortization period for such costs will be one year or less. Accordingly, 0 costs incurred to obtain or fulfill a contract have been capitalized. The Company also applies the practical expedient for not adjusting revenue recognized for the effects of the time value of money. This practical expedient has been elected because the Company collects very little cash from customers under payment terms and the vast majority of ~~payments~~payment terms have a payback period of less than one year.

~~During~~

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Substantially all of the Company’s accounts receivable are with companies in the healthcare industry, U.S. and state governmental agencies that make payments on the customer's behalf, and with individuals. The Company does not believe that receivables due from U.S. and state governmental agencies, such as Medicare, represent a credit risk since the related healthcare programs are funded by the U.S. and state governments. The Company only has one payor, Medicare, that represents greater than 10% of its revenues. Revenues received from Medicare represented approximately 16% and 14% of total revenue for the three ~~and nine~~ months ended ~~March 31,~~September 30, 2020 ~~the Company recognized a $5.5~~ and ~~$10.8 decrease in revenue respectively, which resulted in an ($0.06) and ($0.11) impact to EPS, for tests in which the performance obligation~~2019, respectively. Concentrations of ~~delivering the tests results was met in prior periods. The changes were primarily driven by changes in the estimated transaction price~~credit risk are mitigated due to ~~contractual adjustments, obtaining updated information from payors and patients that was unknown at~~ the ~~time the performance obligation was met and settlements with third party payors.~~

~~(3)~~

~~ACQUISITIONS~~

~~Acquisition of Counsyl, Inc.~~

On July 31, 2018, the Company completed the acquisition of Counsyl, Inc. (“Counsyl”), a leading provider of genetic testing and DNA analysis services, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated May 25, 2018. Pursuant to the termsnumber of the ~~Merger Agreement, Myriad Merger Sub, Inc., a newly-created wholly-owned subsidiary~~Company’s customers as well as their dispersion across many geographic regions. No payor accounted for more than 10% of ~~the Company, was merged with and into Counsyl, with Counsyl continuing as the surviving corporation and a wholly-owned subsidiary of Myriad.~~accounts receivable at September 30, 2020 or 2019. The Company ~~believes the acquisition allows for greater entry into the high-growth reproductive testing market, with the ability to become a leader in women’s health genetic testing.~~

~~The Company acquired Counsyl for total consideration~~does not require collateral from its customers.

Consideration transferred was allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date. Management estimated the fair value of tangible and intangible assets and liabilities in accordance with the applicable accounting guidance for business combinations and utilized the services of third-party valuation consultants. The allocation of the consideration transferred was finalized within the measurement period (which was up to one year from the acquisition date).

Estimated Fair
Value

Current assets

$
42.5

Intangible assets

290.0

Equipment

18.2

Other assets

0.1

Goodwill

99.3

Current liabilities

(19.6
)
Long term liabilities

(0.1
)
Deferred tax liability

(9.2
)
Total fair value purchase price

$
421.2

Less: Cash acquired

(15.3
)
Total consideration transferred

$
405.9

Carrying

amount

Balance September 30, 2018

$
94.9

Fair value adjustment to equipment

0.7

Intangible adjustment

2.9

Working capital adjustment

(1.1
)
Change in deferred tax liability

1.9

Balance March 31, 2020

$
99.3

(3)MARKETABLE INVESTMENT SECURITIES

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Revenue

$
164.0

$
216.6

$
545.4

$
645.9

Income (loss) from operations

(133.7
)

5.9

(163.4
)

23.5

Net income (loss)

(115.2
)

6.9

(144.1
)

18.2

Earnings (loss) per share, basic

$
(1.55
)

$
0.09

$
(1.94
)

$
0.25

Earnings (loss) per share, diluted

$
(1.55
)

$
0.09

$
(1.94
)

$
0.24

~~(4)~~

~~MARKETABLE INVESTMENT SECURITIES~~

In accordance with the adoption of ASC 2016-13, the Company assesses any unrealized loss positions for available-for-sale debt securities for which an allowance for credit losses has not been recorded. The aggregate amount of unrealized losses of these securities was not significant, and the impact of the securities in a continuous loss position to the condensed consolidated statements of operations and comprehensive loss were not material as of September 30, 2020.

Cash, cash equivalents, and maturities of debt securities classified as available-for-sale securities are as follows at ~~March 31,~~September 30, 2020:

~~(5)~~

~~PROPERTY, PLANT AND EQUIPMENT, NET~~

March 31,

June 30,

2020

2019

Land

$
—

$
2.3

Buildings and improvements

—

18.8

Leasehold improvements

31.1

31.0

Equipment

111.2

117.1

142.3

169.2

Less accumulated depreciation

(105.2
)

(111.9
)
Property, plant and equipment, net

$
37.1

$
57.3

(4)FAIR VALUE MEASUREMENTS

The fair value of the ~~balance of property, plant and equipment has been deconsolidated upon~~Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of ~~Privatklinik Dr. Robert Schindlbeck GmbH & Co. KG (the “Clinic”)~~an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). ~~See Note 18~~The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:

Level 1—quoted prices in active markets for ~~additional information regarding~~identical assets and liabilities.

Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the ~~sale~~full term of the ~~Clinic.~~

assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Depreciation expense

$
2.6

$
3.1

$
8.5

$
10.6

Level 3—unobservable inputs.

~~(6)~~

~~GOODWILL AND INTANGIBLE ASSETS~~

Carrying
amount

Ending balance June 30, 2019

$
417.2

Goodwill deconsolidated on sale of the Clinic

(7.3
)
Goodwill impairment charge

(82.0
)
Translation adjustments

(0.8
)
Ending balance March 31, 2020

$
327.1

The fair value of our long-term debt, which we consider a Level 3 measurement, is estimated using discounted cash ~~flows and~~flow analyses, based on the Company’s current estimated incremental borrowing rates for similar borrowing arrangements. The fair ~~values~~value of long-term debt is estimated to be $226.5 at September 30, 2020.

The following table sets forth the fair value of the financial assets and ~~liabilities.~~ liabilities that the Company re-measures on a regular basis:


	Level 1		Level 2		Level 3		Total
September 30, 2020
Money market funds (a)	$	50.0	$	0	$	0	$	50.0
Corporate bonds and notes	0		41.1		0		41.1
Municipal bonds	0		12.8		0		12.8
Federal agency issues	0		4.1		0		4.1
US government securities	0		14.3		0		14.3
Contingent consideration	0		0		(5.9)		(5.9)
Total	$	50.0	$	72.3	$	(5.9)	$	116.4

(a)Money market funds are primarily comprised of exchange traded funds and accrued interest.


	Level 1		Level 2		Level 3		Total
June 30, 2020
Money market funds (a)	$	30.9	$	0	$	0	$	30.9
Corporate bonds and notes	0		50.9		0		50.9
Municipal bonds	0		18.0		0		18.0
Federal agency issues	0		5.6		0		5.6
US government securities	0		16.6		0		16.6
Contingent consideration	0		0		(6.8)		(6.8)
Total	$	30.9	$	91.1	$	(6.8)	$	115.2

(a)Money market funds are primarily comprised of exchange traded funds and accrued interest.

The following table reconciles the change in the fair value of the contingent consideration during the periods presented:


	Carrying amount
Balance June 30, 2020	$	6.8
Payment of contingent consideration	(0.1)
Change in fair value recognized in the income statement	(1.1)
Translation adjustments recognized in other comprehensive loss	0.3
Ending balance September 30, 2020	$	5.9

The fair value of contingent consideration for the three months ended September 30, 2020 decreased compared to the same period in the prior year due to changes in timing of expected cash payments associated with the contingent consideration related to the Sividon acquisition.

(5)PROPERTY, PLANT AND EQUIPMENT, NET


	September 30, 2020		June 30, 2020
Leasehold improvements	$	32.6	$	31.8
Equipment	114.1		112.1
	146.7		143.9
Less accumulated depreciation	(110.0)		(106.9)
Property, plant and equipment, net	$	36.7	$	37.0


	Three months ended September 30,
	2020		2019
Depreciation expense	$	2.4	$	2.9

(6)GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three months ended September 30, 2020, are as follows:


	Diagnostic		Other		Total
Beginning balance	$	270.7	$	56.9	$	327.6
Translation adjustments	0.7		0		0.7
Ending balance	$	271.4	$	56.9	$	328.3

The Company will perform its annual goodwill impairment ~~charge is reflected~~testing during the quarter ended December 31, 2020 as a result of its change in ~~goodwill and intangible asset~~fiscal year end (see Note 16). The upcoming annual assessment may result in impairment charges if there is deterioration in business conditions, negative changes in market factors, or changes in the ~~Condensed Consolidated Statements of Operations.~~

The Company recognized a $1.3 impairment charge for goodwill allocated to the Clinic asset group during the second quarter of fiscal year 2020 that is included in goodwill and intangible asset impairment expense for the nine months ended March 31, 2020. The Clinic asset group is partstrategic priorities of the ~~Company’s other segment. See Note 18 for further discussions regarding the deconsolidation of goodwill upon the closing of the sale of the Clinic.~~

Company and its reporting units.

Intangible assets primarily consist of amortizable assets of purchased licenses and technologies, customer relationships, and trade names as well as non-amortizable intangible assets of in-process technologies and research and development. The following summarizes the amounts reported as intangible assets:

The Company recorded amortization expense during the respective periods for these intangible assets as follows:

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Amortization of intangible assets

$
15.3

$
15.2

$
45.8

$
44.0


	Three months ended September 30,
	2020		2019
Amortization of intangible assets	$	15.3	$	15.3

~~(7)~~

~~ACCRUED LIABILITIES~~

March 31,

June 30,

2020

2019

Employee compensation and benefits

$
55.3

$
48.8

Accrued taxes payable

3.5

3.0

Qui tam settlement

—

9.1

Other

4.3

18.0

Total accrued liabilities

$
63.1

$
78.9

(7)ACCRUED LIABILITIES

~~(8)~~

~~LONG-TERM DEBT~~


	September 30, 2020		June 30, 2020
Employee compensation and benefits	$	47.2	$	47.4
Accrued taxes payable	3.5		6.1
Other	14.7		22.4
Total accrued liabilities	$	65.4	$	75.9

On December 23, 2016, the Company entered into a senior secured revolving credit facility (the “Facility”) by and among Myriad, as borrower, ~~with~~and the lenders from time to time party thereto. On July 31, 2018, the Company entered into Amendment No. 1 ~~(the “Amended Facility”)~~ which ~~effects~~effected an “amend and extend” transaction with respect to the Facility by which the maturity date thereof was extended to July 31, 2023 and the maximum aggregate principal commitment was increased from $300.0 to $350.0. ~~This was~~On May 1, 2020, the Company entered into Amendment No. 2 (the “Amended Facility”), which waived the Company's compliance with certain covenants and modified the interest rate and other terms during the Amendment Period from March 31, 2020 through June 30, 2021 (the "Amendment Period"). Both amendments were accounted for as ~~a modification~~modifications pursuant to guidance in ASC 470-50.

Pursuant to the Amended Facility, ~~Myriad~~the Company borrowed revolving loans in an aggregate principal amount of $300.0 with $1.8 in upfront fees and $0.3 debt issuance costs recorded as a debt discount to be amortized over the term of the Amended Facility. The Company incurred an additional $1.0 in upfront fees as a result of Amendment No. 2, which was also recorded as a debt discount that will be amortized over the term of the Amended Facility. The current balance of the net long-term debt is ~~$225.2.~~$224.6. There are 0 scheduled principal payments of the Amended Facility prior to its maturity date.

The proceeds of the Amended Facility were used to: (i) refinance in full the obligations under the Facility, (ii) finance the acquisition of Counsyl (See Note 3), (iii) pay fees, commissions, transactions costs and expenses incurred in connection with the foregoing, and (iv) for working capital and other general corporate purposes.

The Amended Facility contains customary loan terms, interest rates, representations and warranties, affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions. The Amended Facility also contains certain customary events of default.

Amendment No. 2 modified the Facility to increase the interest rate to be fixed at a spread of LIBOR plus 350 basis points on drawn balance and the undrawn fee was increased to 50 basis points during the Amendment Period. At the end of the Amendment Period, interest rates return to the previous pricing of 200 basis points on drawn balances and an undrawn fee ranging from 25 to 45 basis points based on the Company's leverage ratio. The LIBOR floor was also increased to 1.0% during the Amendment Period. The interest rate as of September 30, 2020 was 4.5%.

Covenants in the Amended Facility impose operating and financial restrictions on the Company. These restrictions may prohibit or place limitations on, among other things, the Company’s ability to incur additional indebtedness, create certain types of liens, and complete mergers, consolidations, or ~~consolidations, and/or~~complete change in control transactions. The Amended Facility may also prohibit or place limitations on the Company’s ability to sell assets, pay dividends or provide other distributions to shareholders. The Company must maintain specified leverage and interest ratios measured as of the end of each quarter as a financial covenant in the Amended Facility. ~~As of March 31, 2020,~~Amendment No. 2 modified the ~~Company was not in~~Amended Facility's compliance with the leverage covenant ~~related to~~and the ~~Amended Facility. As discussed in Note 19, on~~interest coverage ratio covenant, which were waived through March 31, 2021. A minimum liquidity covenant was added for the period beginning May 1, 2020 until March 2021, and a minimum EBITDA covenant was added for the ~~Company entered into~~quarters ending December 31, 2020 and March 31, 2021. Amendment No. 2 toalso revised certain negative covenants of the Amended Facility during the Amendment Period. The Company was in compliance with all financial covenants at September 30, 2020. Based on the continued uncertainty regarding the impact of COVID-19 on the Company’s future operations, it is possible that the Company could be in violation of certain financial covenants contained in the Amended Facility within the Amendment Period, which ~~included~~runs through June 30, 2021. The Company may seek waivers or amendments from the lenders in order to avoid a ~~waiver of non-compliance~~future potential covenant violation, in addition to taking other potential actions. If the Company were unable to comply with the ~~leverage covenant through March 31, 2021.~~

~~During~~covenants in the ~~nine months ended March 31, 2020,~~future, it could result in an increase in the rate of interest and limits on the Company's ability to incur certain additional indebtedness and it could potentially cause the loan repayment to be

accelerated, any of which could have a material adverse impact on the Company’s operations and liquidity. The Company ~~made $8.6~~has and continues to take actions to mitigate the risk of an event of default under the Amended Facility, however there is no assurance it will be successful in ~~principal repayments.~~

doing so.

The Amended Facility is secured by a first-lien security interest in substantially all of the assets of Myriad and certain of its domestic subsidiaries and each such domestic subsidiary of Myriad has guaranteed the repayment of the Amended Facility. Amounts outstanding under the Amended Facility and Facility were as follows:

~~(9)~~

~~OTHER LONG-TERM LIABILITIES~~

March 31,

June 30,

2020

2019

Pension obligation

$
—

$
6.8

Other

—

1.0

Total other long-term liabilities

$
—

$
7.8

(9)OTHER LONG-TERM LIABILITIES


	September 30, 2020		June 30, 2020
Contingent consideration	$	2.6	$	3.7
Other	8.1		4.3
Total other long-term liabilities	$	10.7	$	8.0

The ~~Company previously held 2 non-contributory defined benefit pension plans for certain Clinic employees. The Company sold the Clinic in February~~Company's balance of other long-term liabilities as of September 30, 2020 and ~~as a result the net pension liability was removed upon deconsolidation. See Note 18 for further discussions regarding the sale~~June 30, 2020 consists of the ~~Clinic.~~ Company's portion of social security taxes that have been deferred under the CARES Act that do not have to be deposited until December 2021 and December 2022.

(10)PREFERRED AND COMMON STOCKHOLDERS' EQUITY

~~(10)~~

~~PREFERRED AND COMMON STOCKHOLDER’S EQUITY~~

The Company is authorized to issue up to 150.0 shares of common stock, par value $0.01 per share. There were ~~74.5~~75.2 shares issued and outstanding at ~~March 31,~~September 30, 2020.

Common shares issued and outstanding

Basic earnings per share is computed based on the weighted-average number of shares of common stock outstanding. Diluted earnings per share is computed based on the weighted-average number of shares of common stock, including the dilutive effect of common stock equivalents, outstanding. In periods when the Company has a net loss, stock awards are excluded from the calculation of diluted net loss per share as their inclusion would have an antidilutive effect.

The following is a reconciliation of the denominators of the basic and diluted earnings per share (“EPS”) computations:

Certain outstanding options and restricted stock units (“RSUs”) were excluded from the computation of diluted earnings per share because the effect would have been anti-dilutive. These potential dilutive common shares, which may be dilutive to future diluted earnings per share, are as follows:

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Anti-dilutive options and RSU's excluded from EPS computation

0.4

1.0

0.9

0.7


	Three months ended September 30,
	2020	2019
Anti-dilutive options and RSUs excluded from EPS computation	7.3	1.7

Stock Repurchase Program

In June 2016, the Company’s Board of Directors authorized ~~an eighth~~a share repurchase program of $200.0 of the Company’s outstanding ~~common stock. The Company plans to repurchase its~~ common stock from time to time or on an accelerated basis through open market transactions or privately negotiated transactions as determined by the ~~Company’s~~Company's management. The amount and timing of stock repurchases under the program will depend on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. As of ~~March 31,~~September 30, 2020, the Company ~~has~~is authorized to repurchase up to $110.7 ~~remaining~~of shares under this authorization. NaN shares were repurchased during the three months ended September 30, 2020 or 2019.

(11)SHARE-BASED COMPENSATION

On November 30, 2017, the Company’s shareholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (as amended, the “2017 Plan”). On November 29, 2018 and December 5, 2019, the shareholders approved amendments to the 2017 Plan increasing the shares available to grant. The 2017 Plan allows the Company, under the direction of the Compensation Committee of the Board of Directors, to make grants of restricted and unrestricted stock awards to employees, consultants and directors. As of September 30, 2020, the Company may grant additional shares of common stock under the 2017 Plan with respect to the 0.1 options outstanding under our 2003 Plan and 4.8 options and restricted stock units outstanding under our 2010 Plan, to the extent that those options and restricted stock units expire or are cancelled without delivery of shares of common stock. If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued or reacquired shares, which were subject to the RSU, shall again be available for issuance pursuant to the 2017 Plan.

The number of shares, terms, and vesting periods are determined by the Company’s Board of Directors or a committee thereof on ~~its current share repurchase authorization.~~

an award-by-award basis. RSUs granted to employees generally vest ratably over four years on the anniversary date of the designated day of the last week of the month in which the RSUs are granted. The number of RSUs awarded to certain executive officers may be increased or reduced based on certain additional performance metrics. Options and RSUs granted to our non-employee directors vest in full upon completion of one year of service on the anniversary following the date of the grant. Options generally vest ratably over service periods of four years. Options granted after December 5, 2012 expire eight years from the date of grant, and options granted prior to that date generally expire ten years from the date of grant. In September 2014, the Company ~~uses~~began generally issuing RSUs in lieu of stock options.

During the ~~par value method~~three months ended September 30, 2020, the Company granted stock-based awards to the Company's new President and Chief Executive Officer as an inducement material to his commencement of ~~accounting for its stock repurchases. As a result~~employment and entry into an employment agreement with the Company. The inducement awards were made in accordance with Nasdaq Stock Market rules and were not made under the Company's existing equity plans; the inducement awards are included in the tables below.

A summary of the stock ~~repurchases,~~option activity under the Company’s equity plans, including the Company's inducement awards, for the three months ended September 30, 2020 is as follows:


	Number of shares	Weighted average exercise price
Options outstanding at June 30, 2020	4.8	$	24.47
Options granted	0.7	$	13.38
Less:
Options exercised	0	$	0
Options canceled or expired	(0.1)	$	16.40
Options outstanding at September 30, 2020	5.4	$	23.19
Options exercisable at September 30, 2020	4.7	$	24.62

As of September 30, 2020, there was $5.2 of unrecognized share-based compensation expense related to the inducement stock options that will be recognized over a weighted-average period of 2.8 years.

Restricted Stock Units

A summary of the RSU activity under the Company’s plans, including the Company's inducement awards and RSU awards with performance metrics, for the three months ended September 30, 2020 is as follows:


	Number of shares	Weighted average grant date fair value
RSUs outstanding at June 30, 2020	2.3	$	32.50
RSUs granted	0.4	$	13.24
Less:
RSUs vested	(0.8)	$	33.07
RSUs canceled	0	$	0
RSUs outstanding at September 30, 2020	1.9	$	27.70

As of September 30, 2020, there was $44.1 of total unrecognized share-based compensation expense related to RSUs that will be recognized over a weighted-average period of 2.5 years.

Employee Stock Purchase Plan

The Company ~~reduced~~also has an Employee Stock Purchase Plan that was approved by shareholders in 2012 (the “2012 Purchase Plan”), under which 2.0 shares of common stock ~~and additional paid-in capital and recorded charges to accumulated deficit. The~~have been authorized. Shares are issued under the 2012 Purchase Plan twice yearly at the end of each offering period. As of September 30, 2020, approximately 0.3 shares ~~retired, aggregate~~of common stock are available for issuance under the 2012 Purchase Plan.

Share-Based Compensation Expense

Share-based compensation expense recognized and ~~additional paid-in capital reductions,~~included in the condensed consolidated statements of operations and ~~related charges to accumulated deficit for the repurchases for three and nine months ended March 31, 2020 and 2019 were~~comprehensive loss was allocated as follows:


	Three months ended September 30,
	2020		2019
Cost of molecular diagnostic testing	$	0.3	$	0.2
Cost of pharmaceutical and clinical services	0.1		0.1
Research and development expense	1.3		1.5
Selling, general, and administrative expense	6.7		7.0
Total share-based compensation expense	$	8.4	$	8.8

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Shares purchased and retired

—

—

—

1.6

Common stock and additional paid-in-capital reductions

$
—

$
—

$
—

$
16.9

Charges to retained earnings

$
—

$
—

$
—

$
33.1

~~(11)~~

~~INCOME TAXES~~

In order to determine the Company’s quarterly provision for income taxes, the Company used an estimated annual effective tax rate that is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates. ~~The~~Under the Tax ~~Act~~ Cuts and Jobs Act, ~~reduces~~ the federal corporate tax rate tois 21% for ~~the fiscal~~calendar year ~~ending June 30,~~ 2020. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rate from quarter to quarter.

Income tax benefit for the three months ended ~~March 31,~~September 30, 2020 was ~~$(15.9),~~$28.5, or approximately ~~12.1%~~65.2% of pre-tax ~~income~~loss compared to an income tax benefit of ~~$(3.6),~~$1.7, or approximately ~~109.1%~~7.6% of pre-tax ~~income,~~loss, for the three months ended ~~March 31,~~September 30, 2019. Income tax ~~expense~~benefit for the three months ended ~~March 31,~~September 30, 2020 is based on the Company’s estimated ~~annual~~annualized effective tax rate for the ~~full fiscal year~~six-month transition period ending ~~June 30,~~December 31, 2020, adjusted by discrete items recognized during the period. For the three months ended ~~March 31,~~September 30, 2020, the Company’s recognized effective tax rate differs from the U.S. federal statutory rate primarily due to ~~the effect of state income taxes, foreign income taxes, impairment of intangible assets, sale of foreign subsidiaries, and differences related~~carrying back net operating losses due to the ~~tax effect of equity compensation expense and the deduction realized when exercised, released or sold.~~

CARES Act.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) was enacted. CARES impacted several provisions to the U.S. tax code that ~~may affect~~have affected our ~~fiscal year~~six-month transition period ending ~~June 30,~~December 31, 2020, including, but not limited to, (1) NOL carry-back and carry-forward provisions, (2) deductibility of interest, (3) acceleration of corporate AMT credits, and (4) classification of qualified improvement property. As of the quarter ended ~~March 31,~~September 30, 2020, ~~no material impact has been recognized.~~the Company recognized an income tax net benefit of $20.0 related to the CARES Act, which included an increase in the uncertain tax benefit accrual of $14.3, related to carrying back net operating losses to tax years with higher corporate tax rates than the year the net operating loss originated. The Company will continue to evaluate the application of any and all provisions through the remainder of the ~~fiscal year.~~

six-month transition period ending December 31, 2020.

The Company files U.S., foreign and state income tax returns in jurisdictions with various statutes of limitations. The Company is currently under audit by the state of New Jersey for the fiscal years June 30, 2013 through 2017; the state of New York and Massachusetts for the fiscal years June 30, 2014 through 2016; Germany for the fiscal years June 30, 2013 through 2015; and Switzerland for the fiscal years June 30, 2015 through 2016. Annual and interim tax provisions include amounts considered necessary to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued.

~~(12)~~

~~SHARE-BASED COMPENSATION~~

If an RSU awarded under the 2017 Plan is cancelled or forfeited without the issuance of shares of common stock, the unissued or reacquired shares, which were subject to the RSU, shall again be available for issuance pursuant to the 2017 Plan.(13)

The number of shares, terms, and vesting periods are determined by the Company’s Board of Directors or a committee thereof on an option-by-option basis. Options generally vest ratably over service periods of four years. Options granted after December 5, 2012 expire eight years from the date of grant, and options granted prior to that date generally expire ten years from the date of grant. In September 2014, the Company began issuing restricted stock units (“RSUs”) in lieu of stock options. RSUs granted to employees generally vest ratably over four years on the anniversary date of the designated day of the last week of the month in which the RSUs are granted. The number of RSUs awarded to certain executive officers may be reduced if certain additional

~~performance metrics are not met. Options and RSUs granted to our non-employee directors vest in full upon completion of one year of service on the Board following the date of the grant.~~COMMITMENTS AND CONTINGENCIES

~~Stock Options~~

~~A summary of the stock option activity under the Company’s plans for the nine months ended March 31, 2020 is as follows:~~

Number
of
shares

Weighted
average
exercise
price

Options outstanding at June 30, 2019

5.5

$
24.45

Options granted

—

$
—

Less:

Options exercised

(0.4
)

$
22.93

Options canceled or expired

(0.3
)

$
26.78

Options outstanding at March 31, 2020

4.8

$
24.43

Options exercisable at March 31, 2020

4.8

$
24.43

Number
of
shares

Weighted
average
grant date
fair value

RSUs outstanding at June 30, 2019

2.4

$
37.70

RSUs granted

1.4

$
28.50

Less:

RSUs vested

(0.9
)

$
35.66

RSUs canceled

(0.3
)

$
39.31

RSUs outstanding at March 31, 2020

2.6

$
33.21

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Cost of molecular diagnostic testing

$
0.3

$
0.3

$
0.9

$
0.6

Cost of pharmaceutical and clinical services

0.1

0.1

0.2

0.2

Research and development expense

1.2

1.7

3.8

3.9

Selling, general, and administrative expense

5.9

7.4

18.4

20.0

Total share-based compensation expense

$
7.5

$
9.5

$
23.3

$
24.7

~~(13)~~

~~FAIR VALUE MEASUREMENTS~~

Level 1

Level 2

Level 3

Total

March 31, 2020

Money market funds (a)

$
17.3

$
—

$
—

$
17.3

Corporate bonds and notes

—

61.0

—

61.0

Municipal bonds

—

20.0

—

20.0

Federal agency issues

—

5.6

—

5.6

US government securities

—

16.7

—

16.7

Contingent consideration

—

—

(6.7
)

(6.7
)
Total

$
17.3

$
103.3

$
(6.7
)

$
113.9

~~(a)~~

~~Money market funds are primarily comprised of exchange traded funds and accrued interest.~~

Level 1

Level 2

Level 3

Total

June 30, 2019

Money market funds (a)

$
17.2

$
—

$
—

$
17.2

Corporate bonds and notes

2.5

64.4

—

66.9

Municipal bonds

—

15.4

—

15.4

Federal agency issues

—

9.0

—

9.0

US government securities

—

9.8

—

9.8

Contingent consideration

—

—

(13.8
)

(13.8
)
Total

$
19.7

$
98.6

$
(13.8
)

$
104.5

~~(a)~~

~~Money market funds are primarily comprised of exchange traded funds and accrued interest.~~

Carrying
amount

Balance June 30, 2019

$
13.8

Payment of contingent consideration

(3.9
)
Change in fair value recognized in the income statement

(2.8
)
Translation adjustments recognized in other comprehensive income

(0.4
)
Ending balance March 31, 2020

$
6.7

~~(14)~~

~~COMMITMENTS AND CONTINGENCIES~~

From time to time, the Company receives recoupment requests from third-party payors for alleged overpayments. The Company ~~leases certain office spaces and research and development laboratory facilities, vehicles, and office equipment~~disagrees with ~~remaining lease terms ranging from one to seven years. These leases require monthly lease payments that may be subject to annual increases throughout~~ the lease term. Certain of these leases also include renewal options which allows the Company to, at its election, renew or extend the lease for a fixed or indefinite period of time. These optional periods have not been considered in the determinationcontentions of the ~~right-of-use-assets~~pending requests or ~~lease liabilities associated with these leases as~~has recorded an estimated reserve for the ~~Company did not consider it reasonably certain it would exercise the options.~~

The Company performed evaluations of its contracts and determined each of its identified leases are operating leases. For the nine months ended March 31, 2020, the Company incurred $13.6 in lease costs which are included in operating expenses in the consolidated statement of operations in relation to these operating leases. Of such lease costs, $1.9 was variable lease expense and $0.2 was short-term lease expense, and neither of them were included in the measurement of the Company's operating ROU assets and lease liabilities. The variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components.

~~As of March 31, 2020, the maturities of the Company’s operating lease liabilities were as follows:~~

alleged overpayments.

Fiscal year ending:

2020

$
3.9

2021

14.7

2022

13.5

2023

12.3

2024

12.1

Thereafter

19.3

Total lease payments

$
75.8

Fiscal year ending:

2020

$
15.1

2021

14.1

2022

13.1

2023

12.2

2024

11.9

Thereafter

19.1

Total lease payments

$
85.5

(14) SEGMENT AND RELATED INFORMATION

~~(15)~~

~~EMPLOYEE DEFERRED SAVINGS PLAN~~

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Deferred savings plan contributions

$
2.2

$
2.3

$
6.8

$
6.0

~~(16)~~

~~SEGMENT AND RELATED INFORMATION~~

Segment revenue and operating income (loss) were as follows during the periods presented:

	Diagnostics			Other			Total
Three months ended March 31, 2020
											Diagnostics		Other		Total
Three months ended September 30, 2020										Three months ended September 30, 2020
Revenues										Revenues	$	130.5	$	14.7	$	145.2
Depreciation and amortization										Depreciation and amortization	16.7		1.0		17.7
Segment operating loss										Segment operating loss	(0.3)		(39.3)		(39.6)
Three months ended September 30, 2019										Three months ended September 30, 2019
Revenues	$	150.5		$	13.5		$	164.0		Revenues	$	170.4	$	15.9	$	186.3
Depreciation and amortization		16.8			1.1			17.9		Depreciation and amortization	16.9		1.3		18.2
Segment operating income (loss)		(93.6	)		(40.1	)		(133.7	)	Segment operating income (loss)	17.3		(38.2)		(20.9)
Three months ended March 31, 2019
Revenues	$	200.5		$	16.1		$	216.6
Depreciation and amortization		17.0			1.3			18.3
Segment operating income (loss)		40.6			(34.7	)		5.9
Nine months ended March 31, 2020
Revenues	$	503.6		$	41.8		$	545.4
Depreciation and amortization		50.5			3.8			54.3
Segment operating income (loss)		(46.2	)		(117.2	)		(163.4	)
Nine months ended March 31, 2019
Revenues	$	592.5		$	43.2		$	635.7
Depreciation and amortization		50.7			3.9			54.6
Segment operating income (loss)		96.6			(83.4	)		13.2

Three months ended

Nine months ended

March 31,

March 31,

2020

2019

2020

2019

Total operating income (loss) for reportable segments

$
(133.7
)

$
5.9

$
(163.4
)

$
13.2

Unallocated amounts:

Interest income

0.8

0.7

2.5

2.3

Interest expense

(2.3
)

(3.2
)

(7.7
)

(8.8
)
Other

4.1

(0.1
)

3.8

1.0

Income (loss) from operations before income taxes

(131.1
)

3.3

(164.8
)

7.7

Income tax provision

(15.9
)

(3.6
)

(20.7
)

(1.0
)
Net income (loss)

(115.2
)

6.9

(144.1
)

8.7

Net loss attributable to non-controlling interest

—

—

—

(0.1
)
Net income (loss) attributable to Myriad Genetics, Inc.
stockholders

$
(115.2
)

$
6.9

$
(144.1
)

$
8.8

~~(17)~~

~~SUPPLEMENTAL CASH FLOW INFORMATION~~


	Three months ended September 30,
	2020		2019
Total operating loss for reportable segments	$	(39.6)	$	(20.9)
Unallocated amounts:
Interest income	0.4		0.9
Interest expense	(2.9)		(2.9)
Other	(1.6)		0.6
Loss from operations before income taxes	(43.7)		(22.3)
Income tax benefit	(28.5)		(1.7)
Net loss	(15.2)		(20.6)
Net loss attributable to non-controlling interest	0		0
Net loss attributable to Myriad Genetics, Inc. stockholders	$	(15.2)	$	(20.6)

Nine months ended

March 31,

2020

2019

Cash paid during the period for income taxes

$
0.4

$
5.3

Cash paid for interest

7.3

9.1

Establishment of operating lease right-of-use assets and
lease liabilities

Operating lease right-of-use assets

$
74.5

$
—

Operating lease liabilities

(78.8
)

—

Accrued liabilities and other long-term liabilities

4.3

—

~~(18)~~

~~SALE OF SUBSIDIARY~~

(15) SUPPLEMENTAL CASH FLOW INFORMATION


	Three months ended September 30,
	2020		2019
Cash paid during the period for income taxes	$	1.3	$	0.2
Cash paid for interest	2.6		2.8
Establishment of operating lease right-of-use assets and lease liabilities
Operating lease right-of-use assets	$	—	$	74.5
Operating lease liabilities	—		(78.8)
Accrued liabilities and other long-term liabilities	—		4.3

(16) SUBSEQUENT EVENTS

Change in Fiscal Year

On ~~February 28,~~October 9, 2020, the ~~Company closed the sale~~Company’s Board of ~~the Clinic with Landkreis Starnberg. As~~Directors approved a result of the sale, the Clinic was deconsolidated from the consolidated financial statements in accordance with ASC 810. The Company recorded a pre-tax net gain of $1.0 on the sale, which is recorded in other incomechange in the Company’s ~~Condensed Consolidated Statements of Operations. The gain recorded consists~~ offiscal year from a pre-tax gain of $1.2 associated with the settlement of the Clinic pension, offset by a loss of $0.2 due to the difference between the purchase price and net assets as well as the effects of foreign currency. The Clinic was previously reported as part of the Company’s other segment.

~~(19)~~

~~SUBSEQUENT EVENTS~~

~~COVID-19 Pandemic~~

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (“COVID-19”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, basedfiscal year ending on the ~~rapid increase in exposure globally.~~

~~The full impact~~last day of ~~the COVID-19 outbreak continues~~June of each year to ~~evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have~~a calendar fiscal year ending on the ~~Company’s financial condition, liquidity, and future results~~last day of ~~operations. Management is actively monitoring the impact~~December of the global situation on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread,each year, effective January 1, 2021. Accordingly, the Company ~~is not able to estimate the effects of the COVID-19 outbreak on its results of operations,~~will be issuing financial ~~condition, or liquidity~~statements for ~~future periods.~~

~~CARES Act~~

~~The CARES Act was enacted on March 27,~~a six-month transition period ending December 31, 2020 ~~to provide relief from the economic impacts of COVID-19. On April 10, 2020, the Company received approximately $8.0 from the Public Health~~ and Social Services Emergency Fund to reimburse the Company for health care related expenses or lost revenues that are attributable to COVID-19. These funds do not need to be paid back. The Company also received approximately $29.7 in advance Medicare payments as part of the CARES Act.calendar year financial statements thereafter.

~~Second Amendment to Credit Facility~~

On May 1, 2020, the Company entered into Amendment No. 2 to the Amended Facility discussed in Note 8. Under Amendment No. 2, the lenders waived the Company’s failure to comply with certain covenants for the period ended March 31, 2020. In addition, Amendment No. 2 modified the Amended Facility as follows:

•

The interest rate increased to be fixed at a spread of LIBOR plus 350.0 basis points on drawn balances and the undrawn fee was increased to 50 basis points from March 31, 2020 through June 30, 2021 (“Amendment Period”), at which point they return to the existing pricing. The LIBOR floor was also increased to 1.0% during the Amendment Period.

•

The Company is required to make mandatory prepayments of the revolver when debt exceeds $250.0 and unrestricted cash exceeds $100.0. The Company is also required to make mandatory prepayments in the event of certain asset sales, debt issuance, equity issuance and extraordinary events.

•

Compliance with the leverage ratio covenant and the interest coverage ratio covenant were waived through March 31, 2021, a minimum liquidity covenant was added for the period beginning May 2020 until March 2021, and a minimum EBITDA covenant was added for the second and third quarter of fiscal year 2021. Amendment No. 2 also revises certain negative covenants of the Amended Facility during the Amendment Period.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~General~~

(Dollars and ~~the biological pathways~~shares in which such genes and proteins are involved to better understand the genetic basis of certain human diseases. We believe that identifying these biomarkers (i.e., DNA, RNA and proteins) will enable us to develop novel molecular diagnostic tests that can provide important information to solve unmet medical needs. During the three months ended March 31, 2020, we reported total revenues of $164.0 million and net loss of $115.2 million that included income tax benefit of $(15.9) million resulting in $(1.55) diluted earningsmillions, except per share. During the nine months ended March 31, 2020, we reported total revenues of $545.4 million and net loss of $144.1 million that included income tax benefit of $(20.7) million resulting in $(1.94) diluted earnings per share.

Our business units have been aligned with how the Chief Operating Decision Maker reviews performance and makes decisions in managing the Company. The business units have been aggregated into two reportable segments: (i) diagnostics and (ii) other. The diagnostics segment provides testing and collaborative development of testing that is designed to assess an individual’s risk for developing disease later in life, identify a patient’s likelihood of responding to drug therapy and guide a patient’s dosing to ensure optimal treatment, or assess a patient’s risk of disease progression and disease recurrence. The other segment provides testing products and services to the pharmaceutical, biotechnology and medical research industries, research and development, and clinical services for patients, and includes corporate services such as finance, human resources, legal and information technology.

~~Business Updates~~

~~During the quarter ended March 31, 2020,~~ we began to see a significant business impact from the global coronavirus pandemic and made significant changes to respond to the challenges associated with the pandemic. During the last few weeks of March and into April, volumes for predominantly elective tests such as hereditary cancer, GeneSight, and Vectra declined approximately 70 to 75 percent, volumes for cancer tests such as Prolaris, EndoPredict, and myChoice HRD declined 40 to 45 percent, and volumes for our prenatal tests declined 20 to 25 percent. To respond to the unique business challenges posed by the pandemic, we suspended all field sales personnel from making in-office visits and moved to virtual marketing. Additionally, we have implemented several initiatives in our laboratories to ensure continuity of lab operations across all product lines. The policies implemented are stricter than CDC and local guidance provisions. We also initiated numerous cost-saving initiatives to mitigate financial losses through the period of social distancing. We anticipate a significant reduction in commission, marketing, travel, and mileage expenses based upon our changes in sales policies. In addition, we initiated temporary furloughs for some employees in areas such as operations, billing, and customer service based upon lower sample demand and implemented temporary cuts to senior executive and Board of Director pay. Finally, we have worked with our creditors on our credit facility to obtain a covenant waiver. The waiver provides flexibility on some of the debt covenants through March 31, 2021.

~~As part of our hereditary cancer business, we received reimbursement approval and launched the BRACAnalysis~~^®Diagnostic System in Japan to help physicians determine which people affected with breast and ovarian cancer have Hereditary Breast and Ovarian Cancer (HBOC) syndrome and qualify for additional diagnostic and medical management. BRACAnalysis previously was approved by Japan’s Ministry of Health, Labour and Welfare (MHLW) in November 2019 for this indication.

We published a GeneSight meta-analysis covering four major clinical studies and 1,556 patients. Across the patient populations, patients who received guided care with GeneSight saw a 10 percent improvement in symptoms on average, a 40 percent improvement in response rates, and a 49 percent improvement in remission rates, all of which were highly statistically significant.

~~Regarding our Prolaris test, we~~ presented data at the ASCO Genitourinary Cancer symposium demonstrating the ability of Prolaris to predict which unfavorable intermediate and high-risk prostate cancer patients will respond to multi-modality therapy and which patients can safely avoid the additional morbidity associated with increased treatment. In the study of 718 men, patients who were above the risk threshold saw a statistically significant reduction in metastases when receiving multi-modality therapy. Additionally, the National Comprehensive Cancer Network updated their professional guidelines to include Prolaris across all major risk categories and the European Urology Association Guidelines for 2020 recommend biomarker testing including Prolaris for prostate cancer patients where there is clear clinical actionability.

~~We achieved several milestones with our companion diagnostic products. First,~~ ~~we received FDA approval for~~ ~~BRACAnalysis CDx as a companion diagnostic test for patients with metastatic pancreatic cancer seeking treatment with Lynparza~~^® ~~(olaparib). Additionally, we submitted a supplementary premarket approval (sPMA) application to the U.S. Food and Drug Administration (FDA) for our myChoice~~^® ~~CDx test to help identify women with advanced ovarian cancer who are potential candidates for maintenance therapy with Lynparza~~^® ~~(olaparib) in combination with bevacizumab. Finally, we submitted a supplementary premarket approval (sPMA) application to the U.S. Food and Drug Administration (FDA) for our BRACAnalysis~~^® ~~CDx test as a companion diagnostic to AstraZeneca’s and Merck’s PARP inhibitor Lynparza~~^® ~~(olaparib) for men with metastatic castration-resistant prostate cancer.~~

~~Results of Operations for the Three Months Ended March 31, 2020 and 2019~~

~~Revenue~~

Three months ended
��

March 31,

(In millions)

2020

2019

Change

Revenue

$
164.0

$
216.6

$
(52.6
)

The decrease in revenue was primarily due to a reduction of $32.4 million in Hereditary Cancer Testing revenue due to reduced volumes and reduced reimbursement, including changes in estimates for tests in which the performance obligation of delivering the test results was met in prior periods, a reduction of $10.3 million in Prenatal revenue due to reduced reimbursement and reduced volumes and a reduction of $9.2 million in GeneSight revenue due to reduced volumes.

~~The following table presents additional detail regarding the composition of our total revenue for the three months ended March 31, 2020 and 2019:~~

Three months ended

March 31,

$

% of Total Revenue

(In millions)

2020

2019

Change

2020

2019

Molecular diagnostic revenues:

Hereditary Cancer Testing

$
85.2

$
117.6

$
(32.4
)

52
%

55
%
GeneSight

20.4

29.6

(9.2
)

12
%

14
%
Prenatal

20.3

30.6

(10.3
)

12
%

14
%
Vectra

10.5

11.3

(0.8
)

6
%

6
%
Prolaris

6.8

6.9

(0.1
)

5
%

3
%
EndoPredict

3.5

2.8

0.7

2
%

1
%
Other

3.8

1.7

2.1

3
%

1
%
Total molecular diagnostic revenue

150.5

200.5

(50.0
)

Pharmaceutical and clinical service revenue

13.5

16.1

(2.6
)

8
%

7
%
Total revenue

$
164.0

$
216.6

$
(52.6
)

100
%

100
%

~~Cost of Sales~~

Three months ended

March 31,

(In millions)

2020

2019

Change

Cost of sales

$
50.1

$
48.6

$
1.5

Cost of sales as a % of sales

30.5
%

22.4
%

Cost of sales as a percentage of revenue increased from 22.4% to 30.5% during the three months ended March 31, 2020 compared to the same period in the prior year. The increase was primarily driven by the decline in revenues during the period, including the reduction of reimbursement related to Hereditary Cancer and Prenatal, partially offset by the implementation of efficiency programs in our DNA, RNA, and protein based laboratories.

~~Research and Development Expenses~~

Three months ended

March 31,

(In millions)

2020

2019

Change

R&D expense

$
19.7

$
21.5

$
(1.8
)
R&D expense as a % of sales

12.0
%

9.9
%

Research and development expense for the three months ended March 31, 2020 decreased compared to the same period in the prior year primarily related to synergies recognized as part of the integration of the Counsyl business.

~~Change in the Fair Value of Contingent Consideration~~

Three months ended

March 31,

(In millions)

2020

2019

Change

Change in the fair value of contingent consideration

$
(3.4
)

$
—

$
(3.4
)
Change in the fair value of contingent consideration as a % of sales

(2.1
)%

—

The fair value of contingent consideration for the three months ended March 31, 2020 decreased compared to the same period in the prior year due to changes in timing of expected cash payments associated with the contingent consideration related to the Sividon acquisition.

~~Selling, General and Administrative Expenses~~

Three months ended

March 31,

(In millions)

2020

2019

Change

SG&A expense

$
132.9

$
140.6

$
(7.7
)
SG&A expense as a % of sales

81.0
%

64.9
%

Selling, general and administrative expense decreased for the three months ended March 31, 2020 compared to the same period in the prior year primarily due to the Company implementing cost saving measures due to the decline in testing volumes and a reduction in costs related to synergies recognized relating to the integration of the Counsyl business. These were partially offset by increased legal fees.

~~Goodwill and Intangible Asset Impairment Charges~~

Three months ended

March 31,

(In millions)

2020

2019

Change

Goodwill and intangible asset impairment charges

$
98.4

$
—

$
98.4

Goodwill and intangible asset impairment charges increased for the three months ended March 31, 2020 compared to the same period in the prior year primarily due to the Company recognizing goodwill impairment charges related to the Crescendo reporting unit and charges related to the abandonment of an in-process research and development intangible asset in the current year. There were no impairments recognized in the prior year.

~~Other Income (Expense)~~

Three months ended

March 31,

(In millions)

2020

2019

Change

Other income (expense)

$
2.6

$
(2.6
)

$
5.2

Other income expense increased for the three months ended March 31, 2020 compared to the same period in the prior year, due to the gain recognized on the sale of the Clinic, income from a state grant, and decreased interest expense.

~~Income Tax Expense~~

Three months ended

March 31,

(In millions)

2020

2019

Change

Income tax expense (benefit)

$
(15.9
)

$
(3.6
)

$
(12.3
)
Effective tax rate

12.1
%

109.1
%

Our tax rate is the product of a blended U.S. federal effective rate of 21% and a blended state income tax rate of approximately 3%. Certain significant or unusual items are separately recognized during the period in which they occur and can be a source of variability in the effective tax rates from period to period.

Income tax benefit for the three months ended March 31, 2020 is $(15.9) million, and our effective tax rate was 12.1%. The decrease in the effective rate for the three months ended March 31, 2020 as compared to the same period in prior year is due to state income taxes,

~~foreign income taxes, impairment of intangible assets, sale of foreign subsidiaries, and the differences related to the tax effect of equity compensation expense and the deduction~~ ~~realized when exercised, released or sold.~~

~~Results of Operations for the nine months ended March 31, 2020 and 2019~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Revenue

$
545.4

$
635.7

$
(90.3
)

The decrease in revenue was primarily due to a reduction of $53.1 million in Hereditary Cancer Testing revenue due to reduced volumes of testing and reduced reimbursement per test, including changes in estimates for tests in which the performance obligation of delivering the test results was met in prior periods, a reduction of $19.9 million in Prenatal revenue due to reduced volumes and reduction in average selling price, including changes in estimates for tests in which the performance obligation of delivering the test results was met in prior periods and a reduction of $17.2 million in GeneSight revenue due to reduced volumes.

~~The following table presents additional detail regarding the composition of our total revenue for the nine months ended March 31, 2020 and 2019:~~

Nine months ended

March 31,

$

% of Total Revenue

(In millions)

2020

2019

Change

2020

2019

Molecular diagnostic revenues:

Hereditary Cancer Testing

$
307.6

$
360.7

$
(53.1
)

56
%

57
%
GeneSight

65.6

82.8

(17.2
)

12
%

13
%
Prenatal

60.1

80.0

(19.9
)

11
%

13
%
Vectra

31.8

36.1

(4.3
)

6
%

6
%
Prolaris

20.1

19.2

0.9

4
%

3
%
EndoPredict

8.3

7.4

0.9

1
%

1
%
Other

10.1

6.3

3.8

2
%

1
%
Total molecular diagnostic revenue

503.6

592.5

(88.9
)

Pharmaceutical and clinical service revenue

41.8

43.2

(1.4
)

8
%

7
%
Total revenue

$
545.4

$
635.7

$
(90.3
)

100
%

100
%

~~Cost of Sales~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Cost of sales

$
149.4

$
150.4

$
(1.0
)
Cost of sales as a % of sales

27.4
%

23.7
%

Cost of sales as a percentage of revenue increased from 23.7% to 27.4% during the nine months ended March 31, 2020 compared to the same period in the prior year. The increase was primarily driven by the decline in revenues during the period, including reduction of reimbursement related to Hereditary Cancer and Prenatal and lower gross margins associated with the Counsyl business, partially offset by the implementation of efficiency programs in our DNA, RNA, and protein based laboratories.

~~Research and Development Expenses~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

R&D expense

$
59.8

$
65.0

$
(5.2
)
R&D expense as a % of sales

11.0
%

10.2
%

Research and development expense for the nine months ended March 31, 2020 decreased compared to the same period in the prior year due to synergies recognized as part of the integration of the Counsyl business partially offset by an additional month of Counsyl business expenses included in the current year.

~~Change in the Fair Value of Contingent Consideration~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Change in the fair value of contingent consideration

$
(2.8
)

$
1.4

$
(4.2
)
Change in the fair value of contingent consideration as a % of sales

(0.5
)%

0.2
%

The fair value of contingent consideration for the nine months ended March 31, 2020 decreased compared to the same period in the prior year due to changes in timing of expected cash payments associated with the contingent consideration related to the Sividon acquisition.

~~Selling, General and Administrative Expenses~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

SG&A expense

$
402.7

$
405.7

$
(3.0
)
SG&A expense as a % of sales

73.8
%

63.8
%

Selling, general and administrative expense decreased slightly for the nine months ended March 31, 2020 compared to the same period in the prior year primarily due to the Company implementing cost saving measures due to the decline in testing volumes and a reduction in costs related to synergies recognized relating to the integration of the Counsyl business. These decreases were partially offset by increased legal fees and impairment of goodwill in the current year.

~~Goodwill and Intangible Asset Impairment Charges~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Goodwill and intangible asset impairment charges

$
99.7

$
—

$
99.7

Goodwill and intangible asset impairment charges increased for the nine months ended March 31, 2020 compared to the same period in the prior year primarily due to the Company recognizing goodwill impairment charges related to the Crescendo and Clinic reporting units and charges related to the abandonment of an in-process research and development intangible asset in the current year. There were no impairments recognized in the prior year.

~~Other Income (Expense)~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Other income (expense)

$
(1.4
)

$
(5.5
)

$
4.1

~~For the nine months ended March 31, 2020 compared to the same period in the prior year, the change in other income expense~~ ~~was primarily driven by the~~ ~~gain recognized on the sale of the Clinic, income from a state grant, and decreased interest expense.~~

~~Income Tax Expense~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Income tax expense (benefit)

$
(20.7
)

$
(1.0
)

$
(19.7
)
Effective tax rate

12.6
%

(13.0
)%

Income tax benefit for the nine months ended March 31, 2020 is $(20.7) million and our effective tax rate was 12.6%. The decrease in the effective rate for the nine months ended March 31, 2020 as compared to the same period in prior year is due to state income taxes, foreign income taxes, impairment of intangible assets, sale of foreign subsidiaries, and the differences related to the tax effect of equity compensation expense and the deduction realized when exercised, released or sold.

~~Liquidity and Capital Resources~~

We believe that our existing capital resources and the cash to be generated from future sales will be sufficient to meet our projected operating requirements, including the impacts of COVID-19 on our operations, payment of contingent consideration and repayment of the outstanding Amended Facility, which matures on July 31, 2023, and which has no remaining scheduled principal payments prior to that date, for the foreseeable future. However, our available capital resources may be consumed more rapidly than currently expected and we may need or want to raise additional financing. We may not be able to secure such financing in a timely manner or on favorable terms, if at all. Without additional funds, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations and potentially delay development of our diagnostic tests in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals would be adversely affected.

Our capital deployment strategy focuses on use of resources in three key areas: research and development, acquisitions and the repurchase of our common stock. We believe that research and development provides the best return on invested capital. We also allocate capital for acquisitions that support our business strategy and share ~~repurchases based on business and market conditions.~~

~~The following table represents the balances of cash, cash equivalents and marketable investment securities:~~

data)

March 31,

June 30,

(In millions)

2020

2019

Change

Cash and cash equivalents

$
121.0

$
93.2

$
27.8

Marketable investment securities

60.5

43.7

16.8

Long-term marketable investment securities

42.8

54.9

(12.1
)
Cash, cash equivalents and marketable investment
securities

$
224.3

$
191.8

$
32.5

The increase in cash and cash equivalents was primarily driven by $30.7 million in cash provided by operations and $21.3 million in net cash proceeds from the sale of the Clinic. This is partially offset by the repayment of principle on the Amended Facility of $8.6 million, capital expenditures of $7.8 million, and the payment of contingent consideration of $3.9 million related to Sividon.

~~The following table represents the condensed consolidated cash flow statement:~~

Nine months ended

March 31,

(In millions)

2020

2019

Change

Cash flows from operating activities

$
30.7

52.2

$
(21.5
)
Cash flows from investing activities

9.0

(290.9
)

299.9

Cash flows from financing activities

(11.0
)

210.1

(221.1
)
Effect of foreign exchange rates on cash and cash equivalents

(0.9
)

2.6

(3.5
)
Net increase (decrease) in cash and cash equivalents

27.8

(26.0
)

53.8

Cash and cash equivalents at the beginning of the year

93.2

110.9

(17.7
)
Cash and cash equivalents at the end of the period

$
121.0

$
84.9

$
36.1

Forward-Looking Statements

~~Cash Flows from Operating Activities~~

The decrease in cash flows from operating activities for the nine months ended March 31, 2020, compared to the same period in the prior year, was primarily due a $152.9 million decrease in net income (loss) excluding contingent consideration, offset by the adjustments for impairment of goodwill and intangible assets of $99.7 million and changes in assets and liabilities associated with operating activities.

~~Cash Flows from Investing Activities~~

For the nine months ended March 31, 2020, compared to the same period in the prior year, the decrease in cash used in investing activities was driven primarily by the $278.5 million used for the acquisition of Counsyl that occurred during the same period in the prior year and the $21.3 million in net proceeds from the sale of the Clinic.

~~Cash Flows from Financing Activities~~

For the nine months ended March 31, 2020, compared to the same period in the prior year, the decrease in cash flows from financing activities was driven primarily by the $265.0 million in net proceeds from the revolving credit facility, offset by the use of $50.0 million for the purchase and retirement of common stock, that occurred during the same period in the prior year but did not occur during the nine months ended March 31, 2020, as well as $8.6 million in cash used for repayment of the credit facility and $3.9 million in payment of contingent consideration in the current year.

~~Effects of Inflation~~

~~We do not believe that inflation has had a material impact on our business, sales, or operating results during the periods presented.~~

~~Share Repurchase Program~~

In June 2016, our Board of Directors authorized an eighth share repurchase program of $200.0 million of our outstanding common stock. We plan to repurchase our common stock from time to time or on an accelerated basis through open market transactions or privately negotiated transactions as determined by our management. The amount and timing of stock repurchases under the program will depend on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. As of March 31, 2020, we have $110.7 million remaining on our current share repurchase authorization. See also “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – Issuer Purchases of Equity Securities”.

~~Critical Accounting Policies~~

Critical accounting policies are those policies which are both important to the presentation of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. During the first quarter of fiscal 2019, we adopted new accounting guidance related to lease accounting, which is described above at “Recent Accounting Pronouncements.” There have been no other significant changes to our accounting policies during the period. For a further discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

~~Certain Factors That May Affect Future Results of Operations~~

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “may,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes,” “seek,” “could,” “continue,” “likely,” “will,” “strategy”, “goal” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to: uncertainties associated with COVID-19, including its possible effects on our operations and the demand for our products and services; our ability to efficiently and flexibly manage our business amid uncertainties related to COVID-19; the risk that sales and profit margins of our existing molecular diagnostic tests and pharmaceutical and clinical services may decline or will not continue to increase at historical rates; risks related to our ability to successfully transition from our existing product portfolio to our new tests; risks related to changes in governmental or private insurers’ coverage and reimbursement levels for our tests or our ability to obtain reimbursement for our new tests at comparable levels to our existing tests; risks related to increased competition and the development of new competing tests and services; the risk that we may be unable to develop or achieve commercial success for additional molecular diagnostic tests and pharmaceutical and clinical services in a timely manner, or at all; the risk that we may not successfully develop new markets for our molecular diagnostic tests and pharmaceutical and clinical services, including our ability to successfully generate revenue outside the United States; the risk that licenses to the technology underlying our molecular diagnostic tests and pharmaceutical and clinical services tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with operating our laboratory testing facilities; risks related to public concern over genetic testing in general or our tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to our ability to obtain new corporate collaborations or licenses and acquire new technologies or businesses on satisfactory terms, if at all; risks related to our ability to successfully integrate and derive benefits from any technologies or businesses that we license or acquire; risks related to our projections about the potential market opportunity for our products; the risk that we or our licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying our tests; the risk of patent-infringement claims or challenges to the validity of our patents; risks related to changes in intellectual property laws covering our molecular diagnostic tests and pharmaceutical and clinical services and patents or enforcement in the United States and foreign countries, such as the Supreme Court decisions in Mayo Collab. Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012), Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), and Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014); risks of new, changing and competitive technologies and regulations in the United States and internationally; the risk that we may be unable to comply with financial operating covenants under our credit or lending ~~agreements:~~agreements; the risk that we will be unable to pay, when due, amounts due under our ~~creditor~~credit or lending agreements; and other factors discussed under the heading “Risk Factors” contained in Item 1A of our Annual report on Form 10-K for the fiscal year ended June 30, ~~2019,~~2020, which has been filed with the Securities and Exchange Commission, as well as any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q (including Item 1A below in this report) or Current Reports on Form 8-K.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Quarterly Report or in any document incorporated by reference might not occur. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

General

We are a leading precision medicine company acting as a trusted advisor to transform patient lives through pioneering molecular diagnostics. Through our proprietary technologies, we believe we are positioned to identify important disease genes, the proteins they produce, and the biological pathways in which such genes and proteins are involved to better understand the molecular basis of certain human diseases. We believe that identifying these biomarkers (i.e., DNA, RNA and proteins) will enable us to develop novel molecular diagnostic tests that can provide important information to solve unmet medical needs. During the three months ended September 30, 2020, we reported total revenues of $145.2 and net loss of $(15.2) resulting in $(0.20) net loss per share.

Our business units have been aligned with how the chief operating decision maker reviews performance and makes decisions in managing the Company. The business units have been aggregated into two reportable segments: (i) diagnostics and (ii) other. The diagnostics segment provides testing and collaborative development of testing that is designed to assess an individual’s risk for developing disease later in life, identify a patient’s likelihood of responding to drug therapy and guide a patient’s dosing to ensure optimal treatment, or assess a patient’s risk of disease progression and disease recurrence. The other segment provides testing products and services to the pharmaceutical, biotechnology and medical research industries, research and development, and clinical services for patients, and includes corporate services such as finance, human resources, legal and information technology.

Business Updates

During the quarter ended September 30, 2020, we continued to see improvement in business fundamentals, including test volumes, for our diagnostic products which have been affected by the COVID-19 pandemic. Total test volumes reached 90 percent of pre-pandemic levels by the end of the quarter compared to 75 percent of pre-pandemic levels at the end of the prior quarter ended June 30, 2020. We have also made the following recent announcements:

•Appointed Paul J. Diaz as President and Chief Executive Officer, effective August 13, 2020.

•The American College of Obstetricians and Gynecologists recently issued guidelines recommending prenatal testing for average risk patients. These guidelines have led to new medical policy guidelines for payors covering average risk testing incorporating 24 million covered lives to date.

•Received a local coverage determination ("LCD") for Prolaris for unfavorable intermediate and high-risk patients from Palmetto GBA and CGS Administrators, LLC, two of the administrative contractors for the Centers for Medicare & Medicaid Services. The final LCD becomes effective December 6, 2020.

•The final LCD for pharmacogenomic (PGx) testing became effective during the quarter, which expanded coverage for patients to all healthcare providers licensed and qualified to diagnose the condition and prescribe relevant medications (either independently or in an arrangement).

•Received coverage from the German Federal Joint Committee (G-BA) for the EndoPredict® breast cancer prognostic test. The positive decision means that EndoPredict® is now available to all patients with statutory health insurance in Germany without restrictions as a benefit of the statutory health insurance scheme (GKV).

Change in Fiscal Year

On October 9, 2020, our Board of Directors approved a change in our fiscal year from a fiscal year ending on the last day of June of each year to a calendar fiscal year ending on the last day of December of each year, effective January 1, 2021. Accordingly, we will be issuing financial statements for a six-month transition period ending as of December 31, 2020, and calendar year financial statements thereafter.

Results of Operations for the Three Months Ended September 30, 2020 and 2019

Revenue


	Three months ended September 30,
(In millions)	2020		2019		Change
Revenue	$	145.2	$	186.3	$	(41.1)

The Company's revenues for the three months ended September 30, 2020 continued to be impacted by factors related to the COVID-19 pandemic, including patients incurring obstacles to access healthcare professionals, which resulted in testing volumes declining compared to the prior year across the majority of the products. In addition, the average expected reimbursement per test decreased due to a variety of factors such as negotiating new contracts with payors and the impact of a $2.2 million reduction in revenues for estimated future refunds across the Company's products. Hereditary Cancer Testing revenues decreased $23.9 compared to the same period in the prior year due primarily to an approximate 18% decrease in volumes and an approximate 6% decrease in average reimbursement per test. GeneSight revenues declined $10.8 compared to the same period in the prior year due primarily to an approximate 28% decrease in volumes and an approximate 27% decrease in average reimbursement per test. Prenatal revenues declined $7.0 compared to the same period in the prior year due primarily to a decrease in average reimbursement per test of approximately 34%. Pharmaceutical and clinical service revenue declined $4.8 compared to the same period in the prior year, primarily as a result of selling the Clinic in February 2020.

The following table presents additional detail regarding the composition of our total revenue for the three months ended September 30, 2020 and 2019:


	Three months ended September 30,				$ Change		% of Total Revenue
(In millions)	2020		2019				2020		2019
Molecular diagnostic revenues:
Hereditary Cancer Testing	$	80.6	$	104.5	$	(23.9)	56	%	56	%
Prenatal	16.5		23.5		(7.0)		11	%	13	%
GeneSight	11.9		22.7		(10.8)		8	%	12	%
Vectra	9.1		11.0		(1.9)		6	%	6	%
myChoice CDx	7.8		1.3		6.5		5	%	1	%
Prolaris	6.4		6.5		(0.1)		4	%	3	%
EndoPredict	2.8		2.3		0.5		2	%	1	%
Other	0.6		0.2		0.4		—	%	—	%
Total molecular diagnostic revenue	135.7		172.0		(36.3)
Pharmaceutical and clinical service revenue	9.5		14.3		(4.8)		7	%	8	%
Total revenue	$	145.2	$	186.3	$	(41.1)	100	%	100	%

Cost of Sales


	Three months ended September 30,
(In millions)	2020			2019			Change
Cost of molecular diagnostic testing	$	39.9		$	41.2		$	(1.3)
Cost of molecular diagnostic testing as a % of revenue	29.4		%	24.0		%
Cost of pharmaceutical and clinical services	$	4.3		$	8.5		$	(4.2)
Cost of pharmaceutical and clinical services as a % of revenue	45.3		%	59.4		%

The cost of molecular diagnostic testing as a percentage of revenue increased from 24.0% to 29.4% during the three months ended September 30, 2020 compared to the same period in the prior year. The increase was primarily driven by the decline in revenue from lower test volumes during the period, attributable to the impact of COVID-19 as lower revenues were generated to cover fixed costs of performing the tests. The cost of pharmaceutical and clinical services as a percentage of revenue decreased from 59.4% to 45.3% during the three months ended September 30, 2020 compared to the same period in the prior year due to the sale of the Clinic in February 2020.

Research and Development Expenses


	Three months ended September 30,
(In millions)	2020			2019			Change
R&D expense	$	17.6		$	21.3		$	(3.7)
R&D expense as a % of sales	12.1		%	11.4		%

Research and development expense for the three months ended September 30, 2020 decreased compared to the same period in the prior year primarily due to decreased personnel expenses from a decrease in headcount and decreased technology related expenses from synergies between our labs located in Salt Lake City and in San Francisco.

Change in the Fair Value of Contingent Consideration


	Three months ended September 30,
(In millions)	2020			2019		Change
Change in the fair value of contingent consideration	$	(1.1)		$	0.7	$	(1.8)
Change in the fair value of contingent consideration as a % of sales	(0.8)		%	0.4

Selling, General and Administrative Expenses


	Three months ended September 30,
(In millions)	2020			2019			Change
SG&A expense	$	124.1		$	135.5		$	(11.4)
SG&A expense as a % of sales	85.5		%	72.7		%

Selling, general and administrative expense decreased for the three months ended September 30, 2020 compared to the same period in the prior year primarily due to the Company implementing cost saving measures due to the decline in testing volumes as a result of the impacts of COVID-19 and due to a decline in expense from the sale of the Clinic in February 2020. The cost savings measures implemented by the Company have been partially offset by increased legal expenses and expenses related to our leadership transition in the current six-month transition period ending December 31, 2020.

Other Expense, net


	Three months ended September 30,
(In millions)	2020		2019		Change
Other expense, net	$	(4.1)	$	(1.4)	$	(2.7)

Other expense, net increased for the three months ended September 30, 2020 compared to the same period in the prior year, due to increased foreign exchange losses and to decreased interest income.

Income Tax Benefit


	Three months ended September 30,
(In millions)	2020			2019			Change
Income tax benefit	$	(28.5)		$	(1.7)		$	(26.8)
Effective tax rate	65.2		%	7.6		%

Income tax benefit for the three months ended September 30, 2020 was $28.5, and our effective tax rate was 65.2%. The increase in the effective rate for the three months ended September 30, 2020 as compared to the same period in the prior year is primarily due to carrying back net operating losses due to the CARES Act.

Liquidity and Capital Resources

We believe that our existing capital resources and the cash to be generated from future sales, taking into consideration the expected continuing impacts of COVID-19 on our operations, will be sufficient to meet our projected operating requirements and repay the outstanding Amended Facility, which matures on July 31, 2023 and which has no scheduled principal payments prior to that date. Our available capital resources, however, may be consumed more rapidly than currently expected, and we may need or want to raise additional financing. We may not be able to secure such financing in a timely manner or on favorable terms, if at all. We are subject to financial covenants as part of our outstanding Amended Facility. Based on the continued uncertainty regarding the impact of COVID-19 on our future operations, it is possible that we could be in violation of certain financial covenants contained in the Amended Facility within the Amendment Period, which runs through June 30, 2021. We may seek waivers or amendments from our lenders in order to avoid a future potential covenant violation, in addition to taking other potential actions. If we were unable to comply with the covenants in the future, that could result in an increase in the rate of interest and limits on our ability to incur certain additional indebtedness and could potentially cause the loan repayment to be accelerated. Without additional funds, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations and potentially delay development of our diagnostic tests in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals could be adversely affected.

Additionally, the COVID-19 pandemic and resulting global disruptions have caused significant volatility in financial markets. This disruption can contribute to potential defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of lease and financing credit as well as other segments of the credit markets. We utilize a range of financing methods to fund our operations and capital expenditures and expect to continue to maintain financing flexibility in the current market conditions. However, due to the continuing rapidly evolving global situation, it is not possible to predict whether unanticipated consequences of the pandemic are reasonably likely to materially affect our liquidity and capital resources in the future.

Our capital deployment strategy focuses on use of resources in the key areas of research and development, acquisitions, debt repayment, and the repurchase of our common stock. We believe that investing organically through research and development or acquisitively to support business strategy provides the best return on invested capital.

The following table represents the balances of cash, cash equivalents and marketable investment securities:



(In millions)	September 30, 2020		June 30, 2020		Change
Cash and cash equivalents	$	118.3	$	163.7	$	(45.4)
Marketable investment securities	42.1		54.1		(12.0)
Long-term marketable investment securities	30.2		37.0		(6.8)
Cash, cash equivalents and marketable investment securities	$	190.6	$	254.8	$	(64.2)

The decrease in cash, cash equivalents, and marketable investment securities was primarily driven by $59.3 in cash used by operations and the use of $3.8 for the proceeds from the issuance of common stock, net of shares exchanged for withholding tax, offset by $18.6 in proceeds from maturities of marketable investments.

The following table represents the condensed consolidated cash flow statement:


	Three months ended September 30,
(In millions)	2020		2019		Change
Cash flows from operating activities	$	(59.3)	$	15.8	$	(75.1)
Cash flows from investing activities	17.1		(7.1)		24.2
Cash flows from financing activities	(3.9)		(12.3)		8.4
Effect of foreign exchange rates on cash and cash equivalents	0.7		0.3		0.4
Net decrease in cash and cash equivalents	(45.4)		(3.3)		(42.1)
Cash and cash equivalents at the beginning of the period	163.7		93.2		70.5
Cash and cash equivalents at the end of the period	$	118.3	$	89.9	$	28.4

Cash Flows from Operating Activities

The decrease in cash flows from operating activities for the three months ended September 30, 2020, compared to the same period in the prior year, was primarily due to the $107.9 change in the balance of prepaid taxes and the $17.0 change in the balance of trade accounts receivable, offset by an increase in the unrecognized tax benefit adjustment of $13.2 and an increase in the deferred income tax adjustment of $48.4.

Cash Flows from Investing Activities

For the three months ended September 30, 2020, compared to the same period in the prior year, the change in cash flows from investing activities was driven primarily by the purchase of approximately $23.1 of marketable securities during the same period in the prior year that did not occur during the three months ended September 30, 2020.

Cash Flows from Financing Activities

For the three months ended September 30, 2020, compared to the same period in the prior year, the decrease in cash flows from financing activities was driven primarily by the use of $8.6 in cash for repayment of the credit facility during the same period in the prior year that did not occur during the three months ended September 30, 2020.

Effects of Inflation

We do not believe that inflation has had a material impact on our business, sales, or operating results during the periods presented.

Share Repurchase Program

Our Board of Directors has previously authorized us to repurchase up to $200.0 of our outstanding common stock. We may repurchase our common stock from time to time or on an accelerated basis through open market transactions or privately negotiated transactions as determined by our management. The amount and timing of stock repurchases under the program will depend on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. As of September 30, 2020, we are authorized to repurchase up to $110.7 under our current share repurchase authorization. See also “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – Issuer Purchases of Equity Securities”.

Critical Accounting Policies

Critical accounting policies are those policies which are both important to the presentation of a company’s financial condition and results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. No significant changes to our accounting policies took place during the period. For a further discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk during the ~~nine~~three months ended ~~March 31,~~September 30, 2020 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019,~~2020, which is incorporated by reference herein.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Controls

The Company is in the midst of a multi-year transformation project to achieve better analytics and process efficiencies through the use of Oracle Fusion Cloud Services System. During the ~~nine months~~quarter ended ~~March 31,~~September 30, 2020, wethe Company completed the implementation of certain modules used in the financial statement close process and management reporting. Additional phases will continue to be implemented ~~changes to our processes in response to~~over the ~~adoption~~coming year. Emphasis has been on the maintenance of ~~Accounting Standards Update No. 2016-02 “Lease (Topic 842)” that became~~ effective ~~July 1, 2019. The~~internal controls and assessment of the design and operating effectiveness of ~~these changes will be evaluated as part~~key control activities throughout development and deployment of ~~our annual assessment of the effectiveness of internal controls over financial reporting.~~

each phase.

Other than as described above, there were no changes in our internal control over financial reporting that occurred during the ~~nine~~three months ended ~~March 31,~~September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - Other Information

Item 1. Legal Proceedings

~~Qui Tam Lawsuit~~

In June 2016, our wholly-owned subsidiary, Crescendo Bioscience, Inc. (“CBI”), received a subpoena from the Office of Inspector General of the Department of Health and Human Services requesting that CBI produce documents relating to entities that received payment from CBI for the collection and processing of blood specimens for testing, including a named unrelated company, healthcare providers and other third party entities. The Office of Inspector General subsequently requested additional documentation in December 2017. CBI provided to the Office of Inspector General the documents requested. On January 30, 2020, the United States District Court for the Northern District of California unsealed a qui tam complaint, filed on April 16, 2016 against CBI, alleging violations of the Federal and California False Claims Acts and the California Insurance Fraud Prevention Act. On January 22, 2020, after a multi-year investigation into CBI’s and the Company’s alleged conduct, the United States declined to intervene. On January 27, 2020, the State of California likewise filed its notice of declination. The Company was not aware of the complaint until after it was unsealed. On April 16, 2020, CBI filed a motion to dismiss the action with prejudice and the Company intends to continue to vigorously defend against this action. Due to the nature of this matter and inherent uncertainties, it is not possible to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any.

Purported Securities Class Action Claims

On September 27, 2019, a purported class action complaint was filed in the United States District Court for the District of Utah, against the Company, its former President and Chief Executive Officer, Mark C. Capone, and its ~~Interim President and Chief Executive Officer,~~ Executive Vice President and Chief Financial Officer, R. Bryan Riggsbee (“Defendants”). On February 21, 2020, the plaintiff filed an amended class action complaint, which added the Company’s Executive Vice President of Clinical Development, Bryan M. Dechairo, as an additional Defendant. This action, captioned In re Myriad Genetics, Inc. Securities Litigation (No. 2:19-cv-00707-DBB), is premised upon allegations that the Defendants made false and misleading statements regarding our business, operations, and acquisitions. The lead plaintiff seeks the payment of damages allegedly sustained by it and the purported class by reason of the allegations set forth in the amended complaint, plus interest, and legal and other costs and fees. The Company intends to vigorously defend against this action. Due to the nature of this matter and inherent uncertainties, it is not possible to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any.

Other Legal Proceedings

On August 24, 2018, our wholly-owned subsidiary, Assurex Health, Inc. ("Assurex") was served with an Amended Complaint which had been filed in the Circuit Court of Cook County, Illinois, County Department, Law Division, Civil Action No. 2018 L 004972, by Pipe Trades Services MN Welfare Plan ("Pipe Trades"), as a qui tam relator, on behalf of the State of Illinois, Pipe Trades, and all others similarly situated, purportedly arising from Assurex's alleged violations of the Illinois Insurance Claims Fraud Prevention Act and other causes of action. Pipe Trades seeks certification of a putative class, certification as the purported class representative, and the payment of treble damages allegedly sustained by Pipe Trades and the purported class by reason of the allegations set forth in the amended complaint, plus statutory damages and penalties, plus interest, and legal and other costs and fees. The State of Illinois and Cook County, Illinois, have declined to intervene in the matter. On September 11, 2019, plaintiffs filed a second amended complaint, and on October 10, 2019, Assurex filed a Motion to Dismiss Plaintiff’s Second Amended Complaint for Lack of Personal Jurisdiction and Standing, requesting that the second amended complaint be dismissed in its entirety, with prejudice, for lack of personal jurisdiction and standing. ~~We intend~~On July 20, 2020, this motion was denied. The Company’s motion filed on August 12, 2020, for interlocutory appeal of the denial of the motion to dismiss, was denied in a hearing on October 30, 2020. The Company intends to continue to vigorously defend against this action. Due to the nature of this matter and inherent uncertainties, it is not possible to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if ~~any~~any.

Qui Tam Lawsuit

In June 2016, our wholly-owned subsidiary, Crescendo Bioscience, Inc. (“CBI”), received a subpoena from the Office of Inspector General of the Department of Health and Human Services requesting that CBI produce documents relating to entities that received payment from CBI for the collection and processing of blood specimens for testing, including a named unrelated company, healthcare providers and other third party entities. The Office of Inspector General subsequently requested additional documentation in December 2017. CBI provided to the Office of Inspector General the documents requested. On January 30, 2020, the United States District Court for the Northern District of California unsealed a qui tam complaint, filed on April 16, 2016 against CBI and the Company, alleging violations of the Federal and California False Claims Acts and the California Insurance Fraud Prevention Act. On January 22, 2020, after a multi-year investigation into CBI’s and the Company’s alleged conduct, the United States declined to intervene. On January 27, 2020, the State of California likewise filed its notice of declination. The Company was not aware of the complaint until after it was unsealed. On May 23, 2020, the court denied CBI and the Company’s motion to dismiss. The Company intends to continue to vigorously defend against this action. Due to the nature of this matter and inherent uncertainties, it is not possible to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any.

Other than as set forth above, we are not a party to any legal proceedings that we believe will have a material impact on our business, financial position or results of operations.

Item 1A. Risk Factors

The following risk factor disclosure should be read in conjunction with the risk factors described in the Annual Report on Form 10-K for the fiscal year ended June 30, ~~2019.~~

~~Our~~2020.

We may be adversely impacted if we are unable to successfully implement new systems or unable to adapt systems to our change in fiscal year-end.

Information technology systems are an important part of our business operations. We are in the midst of a multi-year transformation project to achieve better analytics and process efficiencies through the use of Oracle Fusion Cloud Services System ("Oracle Fusion"). This project is expected to improve the efficiency and effectiveness of certain financial ~~condition~~ and ~~results~~business transaction processes and the underlying systems environment. During the quarter ended September 30, 2020, we completed the implementation of ~~operations have been~~certain modules used in the financial statement close process and ~~continue~~management reporting. Additional integrations are expected to take place over the next year. An implementation of this nature is a major undertaking from a financial, management and personnel perspective. The implementation of Oracle Fusion may prove to be ~~adversely affected by~~more difficult, costly, or time consuming than expected, and there can be no assurance that this system will be beneficial to the ~~ongoing coronavirus outbreak.~~

~~Any outbreak~~extent anticipated.

In addition, we have announced a change in our fiscal year end from a fiscal year ending on the last day of ~~contagious diseases, such as COVID-19, or other adverse public health developments,~~June of each year to a calendar fiscal year ending on the last day of December each year, effective January 1, 2021, which will require certain modifications to our systems used for accounting and management reporting. If the systems are not appropriately configured for the change in fiscal year-end it could have a material ~~and~~ adverse effect on our ~~business operations. Such adverse effects could include diversion or prioritization~~results of ~~healthcare resources away from the conduct of genetic testing, disruptions or~~operations and financial condition.

We are subject to debt covenants that impose operating and financial restrictions on us and if we are not able to comply with them, it could have a material adverse impact on our operations and liquidity.

Covenants in the Amended Facility impose operating and financial restrictions on us. These restrictions may prohibit or place limitations on, among other things, our ability to incur additional indebtedness, create certain types of ~~laboratories~~liens, and complete mergers, consolidations, or change in control transactions. Under the Amended Facility, a change in control of the Company, which means that a shareholder or a group of shareholders is or becomes the beneficial owner, directly or indirectly, of more than 35% of the total voting power of the voting stock of the Company, would require mandatory prepayment of the outstanding debt. The Amended Facility may also prohibit or place limitations on our ability to ~~process~~sell assets, pay dividends or provide other distributions to shareholders. These restrictions could also limit our ~~tests,~~ability to take advantage of business opportunities.

We must maintain specified leverage and ~~delays or difficulties~~

interest ratios measured as of the end of each applicable quarter as financial covenants in ~~patients accessing~~the Amended Facility. The Amended Facility, through Amendment No. 2 entered into on May 1, 2020, modified compliance with the leverage covenant and the interest coverage ratio covenant, which were waived through March 31, 2021, and added a minimum EBITDA covenant for the quarters ending December 31, 2020 and March 31, 2021. Based on the continued uncertainty regarding the impact of COVID-19 on our ~~tests, including those resulting from an inability to travel as a result~~future operations, it is possible that we could be in violation of ~~quarantines or other restrictions resulting from COVID-19. Beginning~~certain financial covenants contained in ~~March 2020, our business has experienced a significant decline in sample volumes for our diagnostic tests as~~ the ~~pandemic disrupted operations of healthcare providers and as quarantines and other restrictions due to COVID-19 impacted~~Amended Facility within the ~~accessibility of our tests to patients. We~~modification period, which runs through June 30, 2021.

If we are unable to ~~predict how long~~comply with the ~~decline~~covenants and ratio in the Amended Facility, we may be in default under the agreement. A default would result in an increase in the rate of interest and limits on our ~~testing volumes will continue.~~

~~As COVID-19 continues~~ability to ~~affect individuals~~incur certain additional indebtedness and ~~businesses around~~it could potentially cause the ~~globe, we will likely experience additional disruptions that could severely impact our business, including:~~

•

~~further decreased volume~~loan repayment to be accelerated, any of ~~testing as a result of disruptions to healthcare providers and limitations on the ability of providers to administer tests;~~

•

disruptions or restrictions on the ability of our, our collaborators’, or our suppliers’ personnel to travel, and could result in temporary closures of our facilities or the facilities of our collaborators or suppliers;

•

limitations on employee resources that would otherwise be focused on the development of our products, processing our diagnostic tests, and the conduct of our clinical trials, including because of sickness of employees or their families and requirements imposed on employees to avoid contact with large groups of people; and

•

delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees.

In addition, the continued spread of COVID-19 globally could adversely affect our manufacturing and supply chain. Parts of our direct and indirect supply chain are located overseas, including in China, and may accordingly be subject to disruption. Additionally, our results of operations could be further adversely affected to the extent that COVID-19 or any other epidemic harms our business or the economy in general either domestically or in any other region in which we do business. The extent to which COVID-19 will continue to affect our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others, which could have ~~an additional~~a material adverse ~~effect~~impact on our ~~business~~operations and ~~financial condition.~~

liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

~~In June 2016, we announced that our~~

Our Board of Directors ~~had~~has previously authorized us to repurchase ~~an additional~~up to $200.0 million of our outstanding common ~~stock. In connection with our most recent~~ stock, of which $110.7 million is still available to repurchase ~~authorization, we have been~~as of September 30, 2020. We are authorized to complete the repurchase through open market transactions or through an accelerated share repurchase program, in each case to be executed at management’s discretion based on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. ~~As of the date of this report,~~ ~~the Company has used $50.0 million to repurchase shares of the Company’s stock as part of an accelerated share repurchase~~ ~~under our most recent stock repurchase program, with all such repurchases occurring before the current quarter and no repurchases occurring in the current quarter.~~ The repurchase program may be suspended or discontinued at any time without prior notice. The transactions ~~effectuated to date~~ occurred in open market ~~purchases.~~

~~The details of the activity~~purchases and pursuant to a trading plan under Rule 10b5-1.

No stock repurchases were made under our stock repurchase ~~programs~~program during the three months ended ~~March 31, 2020, are as follows:~~

September 30, 2020.

~~(a)~~

~~(b)~~

~~(c)~~

~~(d)~~

~~Total Number of~~

~~Approximate Dollar~~

~~Shares Purchased as~~

~~Value of Shares that~~

~~Part of Publicly~~

~~May Yet Be~~

~~Total Number of~~

~~Average Price Paid~~

~~Announced Plans or~~

~~Purchased Under the~~

~~Period~~

~~Shares Purchased~~

~~per Share~~

~~Programs~~

~~Plans or Programs~~

~~January 1, 2020 to January 31, 2020~~

—

~~110.7~~

~~February 1, 2020 to February 29, 2020~~

—

~~110.7~~

~~March 1, 2020 to March 31, 2020~~

—

~~110.7~~

~~Total~~

—

~~110.7~~

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

•

None.

•

Compliance with the leverage ratio covenant and the interest coverage ratio covenant were waived through March 31, 2021, a minimum liquidity covenant was added for the period beginning May 2020 until March 2021, a minimum EBITDA covenant was added for the second and third quarter of fiscal year 2021. Amendment No. 2 also revises certain negative covenants of the Amended Facility during the Amendment Period.

The foregoing description of the Amendment No. 2 is a summary and is qualified in its entirety by the terms of the Amendment No. 2, a copy of which is filed as an exhibit to this Quarterly Report on Form 10-Q.

Item 6. Exhibits.

~~10.1~~
10.1			~~Amendment No. 2, dated May 1, 2020, to the Credit~~Executive Employment Agreement ~~dated December 23, 2016, among~~between the Registrant and ~~the lenders from time to time party thereto, and as amended~~Paul J. Diaz dated July ~~31, 2018~~24, 2020..
~~31.1~~
10.2*			Performance -Based Restricted Stock Unit Agreement between the Registrant and Paul J. Dia z dated O c tober 8, 2020.

10.3			Restricted Stock Unit Agreement between the Registrant and Paul J. Dia z dated August 13, 2020.

10.4			Performance-Based Non-Qualified Stock Option Agreement between the Registrant and Paul J. Diaz dated August 13, 2020.

10.5			Non-Qualified Stock Option Agreement between the Registrant and Paul J. Diaz dated August 13, 2020.

10.6			Form of Separation and Release Agreement between the Registrant and Paul J. Diaz.

31.1			Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
~~32.1~~
31.2			Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.

32.1			Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished).
~~101.INS~~
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~101.SCH~~
101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
~~104~~
104			The cover page from the ~~Company’s~~Company's Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2020, has been formatted in Inline XBRL.

			* The appendix to this exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of the omitted appendix will be furnished to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MYRIAD GENETICS, INC.

Date: ~~May 5,~~November 9, 2020	By:	~~By:~~	/s/ ~~R. Bryan Riggsbee~~ Paul J. Diaz
			~~R. Bryan Riggsbee~~ Paul J. Diaz
			~~Interim~~ President and Chief Executive Officer
		(Principal executive officer)



Date: November 9, 2020	By:	/s/ R. Bryan Riggsbee
		R. Bryan Riggsbee
		Executive Vice President, Chief Financial Officer ~~(Principal Executive Officer and~~ ~~Principal Financial Officer)~~


	(Principal financial and accounting officer)

Delaware (State or other jurisdiction of incorporation or organization) 320 Wakara Way, Salt Lake City, UT (Address of principal executive offices) 87-0494517 (I.R.S. Employer Identification No.) 84108 (Zip Code) ~~Delaware~~	~~87-0494517~~
~~(State or other jurisdiction~~ ~~of incorporation or organization)~~	~~(I.R.S. Employer Identification No.)~~

~~320 Wakara Way, Salt Lake City, UT~~	~~84108~~
~~(Address of principal executive offices)~~	~~(Zip Code)~~

	~~Page~~
			Page
		PART I - Financial Information

Item 1.		Financial Statements

		Condensed Consolidated Balance Sheets ~~(Unaudited)~~ as of ~~March 31,~~September 30 , 2020 (Unaudited)and June 30, ~~2019~~20 20	3

		Condensed Consolidated Statements of Operations ~~(Unaudited)~~ for the three ~~and nine~~ months ended ~~March 31,~~September 30 , 2020 and 2019(Unaudited)	4

		Condensed Consolidated Statements of Comprehensive ~~Income (Loss) (Unaudited)~~Loss for the three ~~and nine~~ months ended ~~March 31,~~September 30 , 2020 and 2019(Unaudited)	5

		Condensed Consolidated Statements of Stockholders’ Equity ~~(Unaudited)~~ for the ~~nine~~three months ended ~~March 31,~~September 3 0 , 2020 and 2019(Unaudited)	6

		Condensed Consolidated Statements of Cash Flows ~~(Unaudited)~~ for the ~~nine~~three months ended ~~March 31,~~September 3 0 , 2020 and 2019(Unaudited)	7

		Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	25 21

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	33 27

Item 4.		Controls and Procedures	33 27

		PART II - Other Information

Item 1.		Legal Proceedings	34 28

Item 1A.		Risk Factors	34 28

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	35 29

Item 3.		Defaults Upon Senior Securities	35 29

Item 4.		Mine Safety Disclosures	35 30

Item 5.		Other Information	36 30

Item 6.		Exhibits	36 30

Signatures			37 31

	March 31,			June 30,
ASSETS	2020			2019			ASSETS	September 30, 2020		June 30, 2020
								(Unaudited)
Current assets:							Current assets:
Cash and cash equivalents	$	121.0		$	93.2		Cash and cash equivalents	$	118.3	$	163.7
Marketable investment securities		60.5			43.7		Marketable investment securities	42.1		54.1
Prepaid expenses		12.5			16.6		Prepaid expenses	12.5		13.8
Inventory		30.8			31.4		Inventory	26.6		29.1
Trade accounts receivable		102.5			133.9		Trade accounts receivable	85.1		68.1
Prepaid taxes		25.4			25.1		Prepaid taxes	107.9		0
Other receivables		2.5			4.7		Other receivables	2.0		2.9
Total current assets		355.2			348.6		Total current assets	394.5		331.7
Property, plant and equipment, net		37.1			57.3		Property, plant and equipment, net	36.7		37.0
Operating lease right-of-use assets		64.5			—		Operating lease right-of-use assets	62.7		66.0
Long-term marketable investment securities		42.8			54.9		Long-term marketable investment securities	30.2		37.0
Intangibles, net		620.0			684.7		Intangibles, net	590.9		605.3
Goodwill		327.1			417.2		Goodwill	328.3		327.6
Other assets							Other assets	1.2		0
Total assets	$	1,446.7		$	1,562.7		Total assets	$	1,444.5	$	1,404.6
LIABILITIES AND STOCKHOLDERS' EQUITY							LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:							Current liabilities:
Accounts payable	$	30.3		$	33.3		Accounts payable	$	19.1	$	21.7
Accrued liabilities		63.1			78.9		Accrued liabilities	65.4		75.9
Current maturities of operating lease liabilities		12.9			—		Current maturities of operating lease liabilities	13.6		13.5
Short-term contingent consideration		3.1			3.4		Short-term contingent consideration	3.3		3.1
Deferred revenue		3.8			2.2		Deferred revenue	32.3		32.8
Total current liabilities		113.2			117.8		Total current liabilities	133.7		147.0
Unrecognized tax benefits		22.3			21.7		Unrecognized tax benefits	37.4		23.5
Long-term deferred taxes							Long-term deferred taxes	75.3		26.6
Long-term debt							Long-term debt	224.6		224.4
Noncurrent operating lease liabilities		55.9			—		Noncurrent operating lease liabilities	53.5		56.9
Other long-term liabilities		—			7.8		Other long-term liabilities	10.7		8.0
Contingent consideration		3.6			10.4
Long-term debt		225.2			233.5
Long-term deferred taxes		59.3			82.6
Total liabilities		479.5			473.8		Total liabilities	535.2		486.4
Commitments and contingencies							Commitments and contingencies
Stockholders’ equity:							Stockholders’ equity:
Common stock, 74.5 and 73.5 shares outstanding at March 31, 2020 and June 30, 2019 respectively		0.7			0.7
Common stock, 75.2 and 74.7 shares outstanding at September 30, 2020 and June 30, 2020 respectively							Common stock, 75.2 and 74.7 shares outstanding at September 30, 2020 and June 30, 2020 respectively	0.8		0.7
Additional paid-in capital		1,092.8			1,068.0		Additional paid-in capital	1,101.2		1,096.6
Accumulated other comprehensive loss		(7.8	)		(5.4	)	Accumulated other comprehensive loss	(3.6)		(5.2)
Retained earnings (deficit)		(118.5	)		25.6
Accumulated deficit							Accumulated deficit	(189.1)		(173.9)
Total Myriad Genetics, Inc. stockholders’ equity		967.2			1,088.9		Total Myriad Genetics, Inc. stockholders’ equity	909.3		918.2
Non-Controlling Interest		—			—
Non-controlling interest							Non-controlling interest	0		0
Total stockholders' equity		967.2			1,088.9		Total stockholders' equity	909.3		918.2
Total liabilities and stockholders’ equity	$	1,446.7		$	1,562.7		Total liabilities and stockholders’ equity	$	1,444.5	$	1,404.6


	Three months ended September 30,
	2020		2019
Net loss attributable to Myriad Genetics, Inc. stockholders	$	(15.2)	$	(20.6)
Unrealized loss on available-for-sale debt securities, net of tax	(0.2)		0
Change in foreign currency translation adjustment, net of tax	1.8		(2.2)
Comprehensive loss	(13.6)		(22.8)
Comprehensive loss attributable to non-controlling interest	0		0
Comprehensive loss attributable to Myriad Genetics, Inc. shareholders	$	(13.6)	$	(22.8)

	Amortized		Estimated
	cost		fair value			Amortized cost		Estimated fair value
Cash	$	103.7	$	103.7	Cash	$	68.3	$	68.3
Cash equivalents		17.3		17.3	Cash equivalents	50.0		50.0
Available-for-sale:					Available-for-sale:
Due within one year		60.2		60.5	Due within one year	41.8		42.1
Due after one year through five years		42.6		42.8	Due after one year through five years	29.5		30.2
Due after five years		—		—	Due after five years	0		0
Total	$	223.8	$	224.3	Total	$	189.6	$	190.6


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Three months ended						Nine months ended
	March 31,						March 31,							Three months ended September 30,
	2020			2019			2020			2019				2020		2019
Molecular diagnostic testing	$	150.5		$	200.5		$	503.6		$	592.5		Molecular diagnostic testing	$	135.7	$	172.0
Pharmaceutical and clinical services		13.5			16.1			41.8			43.2		Pharmaceutical and clinical services	9.5		14.3
Total revenue		164.0			216.6			545.4			635.7		Total revenue	145.2		186.3
Costs and expenses:													Costs and expenses:
Cost of molecular diagnostic testing		43.1			40.3			125.3			126.6		Cost of molecular diagnostic testing	39.9		41.2
Cost of pharmaceutical and clinical services		7.0			8.3			24.1			23.8		Cost of pharmaceutical and clinical services	4.3		8.5
Research and development expense		19.7			21.5			59.8			65.0		Research and development expense	17.6		21.3
Change in the fair value of contingent consideration		(3.4	)		—			(2.8	)		1.4		Change in the fair value of contingent consideration	(1.1)		0.7
Selling, general, and administrative expense		132.9			140.6			402.7			405.7		Selling, general, and administrative expense	124.1		135.5
Goodwill and intangible asset impairment charges		98.4			—			99.7			—
Total costs and expenses		297.7			210.7			708.8			622.5		Total costs and expenses	184.8		207.2
Operating income (loss)		(133.7	)		5.9			(163.4	)		13.2
Operating loss													Operating loss	(39.6)		(20.9)
Other income (expense):													Other income (expense):
Interest income		0.8			0.7			2.5			2.3		Interest income	0.4		0.9
Interest expense		(2.3	)		(3.2	)		(7.7	)		(8.8	)	Interest expense	(2.9)		(2.9)
Other		4.1			(0.1	)		3.8			1.0		Other	(1.6)		0.6
Total other income (expense):		2.6			(2.6	)		(1.4	)		(5.5	)
Income (loss) before income tax		(131.1	)		3.3			(164.8	)		7.7
Income tax provision (benefit)		(15.9	)		(3.6	)		(20.7	)		(1.0	)
Net income (loss)	$	(115.2	)	$	6.9		$	(144.1	)	$	8.7
Total other expense, net													Total other expense, net	(4.1)		(1.4)
Loss before income tax													Loss before income tax	(43.7)		(22.3)
Income tax benefit													Income tax benefit	(28.5)		(1.7)
Net loss													Net loss	(15.2)		(20.6)
Net loss attributable to non-controlling interest		—			—			—			(0.1	)	Net loss attributable to non-controlling interest	0		0
Net income (loss) attributable to Myriad Genetics, Inc. stockholders	$	(115.2	)	$	6.9		$	(144.1	)	$	8.8
Earnings (loss) per share:
Basic	$	(1.55	)	$	0.09		$	(1.94	)	$	0.12
Diluted	$	(1.55	)	$	0.09		$	(1.94	)	$	0.12
Net loss attributable to Myriad Genetics, Inc. stockholders													Net loss attributable to Myriad Genetics, Inc. stockholders	$	(15.2)	$	(20.6)
Net loss per share:													Net loss per share:
Basic and diluted													Basic and diluted	$	(0.20)	$	(0.28)
Weighted average shares outstanding:													Weighted average shares outstanding:
Basic		74.5			73.3			74.2			73.5
Diluted		74.5			74.9			74.2			76.4
Basic and diluted													Basic and diluted	74.7		73.7

						Accumulated			Retained						Myriad
			Additional			other			earnings			Non-			Genetics, Inc.
	Common		paid-in			comprehensive			(accumulated			Controlling			Stockholders’
	stock		capital			loss			deficit)			Interest			equity
BALANCES AT JUNE 30, 2018	$	0.7	$	915.4		$	(4.1	)	$	54.1		$	—		$	966.1
Issuance of common stock under share-based compensation plans		—		1.9			—			—			—			1.9
Issuance of common stock for acquisition		—		127.4			—			—			—			127.4
Share-based payment expense		—		7.7			—			—			—			7.7
Net loss		—		—			—			(0.7	)		—			(0.7	)
Other comprehensive loss, net of tax		—		—			(0.2	)		—			—			(0.2	)
BALANCES AT SEPTEMBER 30, 2018	$	0.7	$	1,052.4		$	(4.3	)	$	53.4		$	—		$	1,102.2
Issuance of common stock under share-based compensation plans		—		2.6			—			—			—			2.6
Share-based payment expense		—		7.5			—			—			—			7.5
Repurchase and retirement of common stock		—		(16.9	)		—			(33.1	)		—			(50.0	)
Net income		—		—			—			2.6			—			2.6
Other comprehensive loss, net of tax		—		—			(0.7	)		—			—			(0.7	)
BALANCES AT DECEMBER 31, 2018	$	0.7	$	1,045.6		$	(5.0	)	$	22.9		$	—		$	1,064.2
Issuance of common stock under share-based compensation plans		—		1.9			—			—			—			1.9
Share-based payment expense		—		9.5			—			—			—			9.5
Net income		—		—			—			6.9			—			6.9
Other comprehensive loss, net of tax		—		—			(0.7	)		—			—			(0.7	)
BALANCES AT MARCH 31, 2019	$	0.7	$	1,057.0		$	(5.7	)	$	29.8		$	—		$	1,081.8

BALANCES AT JUNE 30, 2019	$	0.7	$	1,068.0		$	(5.4	)	$	25.6		$	—		$	1,088.9
Issuance of common stock under share-based compensation plans		—		(0.5	)		—			—			—			(0.5	)
Share-based payment expense		—		8.8			—			—			—			8.8
Net loss		—		—			—			(20.6	)		—			(20.6	)
Other comprehensive loss, net of tax		—		—			(2.1	)					—			(2.1	)
BALANCES AT SEPTEMBER 30, 2019	$	0.7	$	1,076.3		$	(7.5	)	$	5.0		$	—		$	1,074.5
Issuance of common stock under share-based compensation plans		—		1.8			—			—			—			1.8
Share-based payment expense		—		7.0			—			—			—			7.0
Non-controlling interest		—		—			—			—			0.1			0.1
Net loss		—		—			—			(8.3	)		—			(8.3	)
Other comprehensive income, net of tax		—		—			2.2			—			—			2.2
BALANCES AT DECEMBER 31, 2019	$	0.7	$	1,085.1		$	(5.3	)	$	(3.3	)	$	0.1		$	1,077.3
Issuance of common stock under share-based compensation plans		—		0.2			—			—			—			0.2
Share-based payment expense		—		7.5			—			—			—			7.5
Non-controlling interest		—		—			—			—			(0.1	)		(0.1	)
Net loss		—		—			—			(115.2	)		—			(115.2	)
Reclassification out of accumulated other comprehensive loss upon the deconsolidation of a subsidiary		—		—			0.1			—			—			0.1
Other comprehensive loss, net of tax		—		—			(2.6	)		—			—			(2.6	)
BALANCES AT MARCH 31, 2020	$	0.7	$	1,092.8		$	(7.8	)	$	(118.5	)	$	—		$	967.2


	Common stock		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings (accumulated deficit)		Myriad Genetics, Inc. Stockholders’ equity
BALANCES AT JUNE 30, 2019	$	0.7	$	1,068.0	$	(5.4)	$	25.6	$	1,088.9
Issuance of common stock under share-based compensation plans, net of shares exchanged for withholding tax	—		(0.5)		—		—		(0.5)
Share-based payment expense	—		8.8		—		—		8.8
Net loss	—		—		—		(20.6)		(20.6)
Other comprehensive loss, net of tax	—		—		(2.1)		—		(2.1)
BALANCES AT SEPTEMBER 30, 2019	$	0.7	$	1,076.3	$	(7.5)	$	5.0	$	1,074.5

BALANCES AT JUNE 30, 2020	$	0.7	$	1,096.6	$	(5.2)	$	(173.9)	$	918.2
Issuance of common stock under share-based compensation plans, net of shares exchanged for withholding tax	0.1		(3.8)		—		—		(3.7)
Share-based payment expense	—		8.4		—		—		8.4
Net loss	—		—		—		(15.2)		(15.2)
Other comprehensive income, net of tax	—		—		1.6		—		1.6
BALANCES AT SEPTEMBER 30, 2020	$	0.8	$	1,101.2	$	(3.6)	$	(189.1)	$	909.3


	Three months ended March 31,													Three months ended September 30,
	2020						2019							2020						2019
(In millions)	U.S.		RoW		Total		U.S.		RoW		Total		(In millions)	U.S.		RoW		Total		U.S.		RoW		Total
Molecular diagnostic revenues:													Molecular diagnostic revenues:
Hereditary Cancer Testing	$	81.3	$	3.9	$	85.2	$	114.3	$	3.3	$	117.6	Hereditary Cancer Testing	$	72.1	$	8.5	$	80.6	$	100.6	$	3.9	$	104.5
Prenatal													Prenatal	16.4		0.1		16.5		23.5		0		23.5
GeneSight		20.4		—		20.4		29.6		—		29.6	GeneSight	11.9		0		11.9		22.7		0		22.7
Prenatal		20.2		0.1		20.3		30.6		—		30.6
Vectra		10.5		—		10.5		11.3		—		11.3	Vectra	9.1		0		9.1		11.0		0		11.0
myChoice CDx													myChoice CDx	7.6		0.2		7.8		1.3		0		1.3
Prolaris		6.8		—		6.8		6.9		—		6.9	Prolaris	6.4		0		6.4		6.5		0		6.5
EndoPredict		0.6		2.9		3.5		0.5		2.3		2.8	EndoPredict	0.4		2.4		2.8		0.5		1.8		2.3
Other		3.6		0.2		3.8		1.5		0.2		1.7	Other	0.6		0		0.6		0.1		0.1		0.2
Total molecular diagnostic revenue		143.4		7.1		150.5		194.7		5.8		200.5	Total molecular diagnostic revenue	124.5		11.2		135.7		166.2		5.8		172.0
Pharmaceutical and clinical service revenue		9.6		3.9		13.5		9.7		6.4		16.1	Pharmaceutical and clinical service revenue	9.5		0		9.5		8.5		5.9		14.3
Total revenue	$	153.0	$	11.0	$	164.0	$	204.4	$	12.2	$	216.6	Total revenue	$	134.0	$	11.2	$	145.2	$	174.7	$	11.7	$	186.3

	Nine months ended March 31,
	2020						2019
(In millions)	U.S.		RoW		Total		U.S.		RoW		Total
Molecular diagnostic revenues:
Hereditary Cancer Testing	$	295.0	$	12.6	$	307.6	$	351.4	$	9.3	$	360.7
GeneSight		65.6		—		65.6		82.8		—		82.8
Prenatal		59.9		0.2		60.1		80.0		—		80.0
Vectra		31.8		—		31.8		36.1		—		36.1
Prolaris		20.0		0.1		20.1		19.1		0.1		19.2
EndoPredict		1.5		6.8		8.3		1.2		6.2		7.4
Other		9.9		0.2		10.1		5.8		0.5		6.3
Total molecular diagnostic revenue		483.7		19.9		503.6		576.4		16.1		592.5
Pharmaceutical and clinical service revenue		26.3		15.5		41.8		25.5		17.7		43.2
Total revenue	$	510.0	$	35.4	$	545.4	$	601.9	$	33.8	$	635.7

	Estimated Fair Value
Current assets	$	42.5
Intangible assets		290.0
Equipment		18.2
Other assets		0.1
Goodwill		99.3
Current liabilities		(19.6	)
Long term liabilities		(0.1	)
Deferred tax liability		(9.2	)
Total fair value purchase price	$	421.2
Less: Cash acquired		(15.3	)
Total consideration transferred	$	405.9

	Carrying
	amount
Balance September 30, 2018	$	94.9
Fair value adjustment to equipment		0.7
Intangible adjustment		2.9
Working capital adjustment		(1.1	)
Change in deferred tax liability		1.9
Balance March 31, 2020	$	99.3

			Gross		Gross
			unrealized		unrealized						Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Estimated fair value
	Amortized		holding		holding			Estimated
	cost		gains		losses			fair value
At March 31, 2020:
At September 30, 2020:										At September 30, 2020:
Cash and cash equivalents:										Cash and cash equivalents:
Cash	$	103.7	$	—	$	—		$	103.7	Cash	$	68.3	$	—	$	—	$	68.3
Cash equivalents		17.3		—		—		$	17.3	Cash equivalents	50.0		—		—		$	50.0
Total cash and cash equivalents		121.0		—		—			121.0	Total cash and cash equivalents	118.3		—		—		118.3
Available-for-sale:										Available-for-sale:
Corporate bonds and notes		61.0		0.2		(0.2	)		61.0	Corporate bonds and notes	40.5		0.6		0		41.1
Municipal bonds		19.9		0.1		—			20.0	Municipal bonds	12.6		0.2		0		12.8
Federal agency issues		5.5		0.1		—			5.6	Federal agency issues	4.0		0.1		0		4.1
US government securities		16.4		0.3		—			16.7	US government securities	14.2		0.1		0		14.3
Total	$	223.8	$	0.7	$	(0.2	)	$	224.3	Total	$	189.6	$	1.0	$	0	$	190.6

	Carrying amount
Ending balance June 30, 2019	$	417.2
Goodwill deconsolidated on sale of the Clinic		(7.3	)
Goodwill impairment charge		(82.0	)
Translation adjustments		(0.8	)
Ending balance March 31, 2020	$	327.1

	Nine months ended		Year ended
	March 31,		June 30,				Three months ended September 30,	Year ended June 30,
	2020		2019				2020	2020
Beginning common stock issued and outstanding		73.5		70.6		Beginning common stock issued and outstanding	74.7	73.5
Common stock issued upon exercise of options and employee stock plans		1.0		4.5
Repurchase and retirement of common stock		—		(1.6	)
Common stock issued upon exercise of options, vesting of restricted stock units and employee stock plans						Common stock issued upon exercise of options, vesting of restricted stock units and employee stock plans	0.5	1.2

Common stock issued and outstanding at end of period		74.5		73.5		Common stock issued and outstanding at end of period	75.2	74.7

	Number of shares			Weighted average exercise price
Options outstanding at June 30, 2019		5.5		$	24.45
Options granted		—		$	—
Less:
Options exercised		(0.4	)	$	22.93
Options canceled or expired		(0.3	)	$	26.78
Options outstanding at March 31, 2020		4.8		$	24.43
Options exercisable at March 31, 2020		4.8		$	24.43

	Number of shares			Weighted average grant date fair value
RSUs outstanding at June 30, 2019		2.4		$	37.70
RSUs granted		1.4		$	28.50
Less:
RSUs vested		(0.9	)	$	35.66
RSUs canceled		(0.3	)	$	39.31
RSUs outstanding at March 31, 2020		2.6		$	33.21

	Carrying amount
Balance June 30, 2019	$	13.8
Payment of contingent consideration		(3.9	)
Change in fair value recognized in the income statement		(2.8	)
Translation adjustments recognized in other comprehensive income		(0.4	)
Ending balance March 31, 2020	$	6.7

Fiscal year ending:
2020	$	3.9
2021		14.7
2022		13.5
2023		12.3
2024		12.1
Thereafter		19.3
Total lease payments	$	75.8

Fiscal year ending:
2020	$	15.1
2021		14.1
2022		13.1
2023		12.2
2024		11.9
Thereafter		19.1
Total lease payments	$	85.5

	Three months ended				��
	March 31,
(In millions)	2020		2019			Change
Revenue	$	164.0	$	216.6		$	(52.6	)