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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2020

OR

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

For the transition period from to

Commission file number: 0-26642

MYRIAD GENETICS, INC.

(Exact name of registrant as specified in its charter)

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)

Registrant's telephone number, including area code: (801) 584-3600

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

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Public Common Stock, $0.01 par value |  | MYGN |  | Nasdaq Global Select Market

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 ☒ 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 ☒ 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 ☒

As of May 1, 2020, the registrant had 74,554,701 shares of $0.01 par value common stock outstanding.

MYRIAD GENETICS, INC.

INDEX TO FORM 10-Q

|  | Page
| PART I - Financial Information |
Item 1. | Financial Statements |
| Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2020 and June 30, 2019 | 3
| Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended March 31, 2020 and 2019 | 4
| Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and nine months ended March 31, 2020 and 2019 | 5
| Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the nine months ended March 31, 2020 and 2019 | 6
| Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended March 31, 2020 and 2019 | 7
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 8
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 33
Item 4. | Controls and Procedures | 33
| PART II - Other Information |
Item 1. | Legal Proceedings | 34
Item 1A. | Risk Factors | 34
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 35
Item 3. | Defaults Upon Senior Securities | 35
Item 4. | Mine Safety Disclosures | 35
Item 5. | Other Information | 36
Item 6. | Exhibits | 36
Signatures | 37

2

MYRIAD GENETICS, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(In millions)

|  | March 31, |  |  | June 30, |
ASSETS |  | 2020 |  |  | 2019 |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 121.0 |  |  | $ | 93.2 |
Marketable investment securities |  |  | 60.5 |  |  |  | 43.7 |
Prepaid expenses |  |  | 12.5 |  |  |  | 16.6 |
Inventory |  |  | 30.8 |  |  |  | 31.4 |
Trade accounts receivable |  |  | 102.5 |  |  |  | 133.9 |
Prepaid taxes |  |  | 25.4 |  |  |  | 25.1 |
Other receivables |  |  | 2.5 |  |  |  | 4.7 |
Total current assets |  |  | 355.2 |  |  |  | 348.6 |
Property, plant and equipment, net |  |  | 37.1 |  |  |  | 57.3 |
Operating lease right-of-use assets |  |  | 64.5 |  |  |  | — |
Long-term marketable investment securities |  |  | 42.8 |  |  |  | 54.9 |
Intangibles, net |  |  | 620.0 |  |  |  | 684.7 |
Goodwill |  |  | 327.1 |  |  |  | 417.2 |
Total assets |  | $ | 1,446.7 |  |  | $ | 1,562.7 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 30.3 |  |  | $ | 33.3 |
Accrued liabilities |  |  | 63.1 |  |  |  | 78.9 |
Current maturities of operating lease liabilities |  |  | 12.9 |  |  |  | — |
Short-term contingent consideration |  |  | 3.1 |  |  |  | 3.4 |
Deferred revenue |  |  | 3.8 |  |  |  | 2.2 |
Total current liabilities |  |  | 113.2 |  |  |  | 117.8 |
Unrecognized tax benefits |  |  | 22.3 |  |  |  | 21.7 |
Noncurrent operating lease liabilities |  |  | 55.9 |  |  |  | — |
Other long-term liabilities |  |  | — |  |  |  | 7.8 |
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 |
Commitments and contingencies |  |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |  |
Common stock, 74.5 and 73.5 shares outstanding at March 31, 2020 and June 30, 2019 respectively |  |  | 0.7 |  |  |  | 0.7 |
Additional paid-in capital |  |  | 1,092.8 |  |  |  | 1,068.0 |
Accumulated other comprehensive loss |  |  | (7.8 | ) |  |  | (5.4 | )
Retained earnings (deficit) |  |  | (118.5 | ) |  |  | 25.6 |
Total Myriad Genetics, Inc. stockholders’ equity |  |  | 967.2 |  |  |  | 1,088.9 |
Non-Controlling Interest |  |  | — |  |  |  | — |
Total stockholders' equity |  |  | 967.2 |  |  |  | 1,088.9 |
Total liabilities and stockholders’ equity |  | $ | 1,446.7 |  |  | $ | 1,562.7 |

See accompanying notes to condensed consolidated financial statements.

3

MYRIAD GENETICS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(In millions, except per share amounts)

|  | Three months ended |  |  | Nine months ended |
|  | March 31, |  |  | March 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Molecular diagnostic testing |  | $ | 150.5 |  |  | $ | 200.5 |  |  | $ | 503.6 |  |  | $ | 592.5 |
Pharmaceutical and clinical services |  |  | 13.5 |  |  |  | 16.1 |  |  |  | 41.8 |  |  |  | 43.2 |
Total revenue |  |  | 164.0 |  |  |  | 216.6 |  |  |  | 545.4 |  |  |  | 635.7 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of molecular diagnostic testing |  |  | 43.1 |  |  |  | 40.3 |  |  |  | 125.3 |  |  |  | 126.6 |
Cost of pharmaceutical and clinical services |  |  | 7.0 |  |  |  | 8.3 |  |  |  | 24.1 |  |  |  | 23.8 |
Research and development expense |  |  | 19.7 |  |  |  | 21.5 |  |  |  | 59.8 |  |  |  | 65.0 |
Change in the fair value of contingent consideration |  |  | (3.4 | ) |  |  | — |  |  |  | (2.8 | ) |  |  | 1.4 |
Selling, general, and administrative expense |  |  | 132.9 |  |  |  | 140.6 |  |  |  | 402.7 |  |  |  | 405.7 |
Goodwill and intangible asset impairment charges |  |  | 98.4 |  |  |  | — |  |  |  | 99.7 |  |  |  | — |
Total costs and expenses |  |  | 297.7 |  |  |  | 210.7 |  |  |  | 708.8 |  |  |  | 622.5 |
Operating income (loss) |  |  | (133.7 | ) |  |  | 5.9 |  |  |  | (163.4 | ) |  |  | 13.2 |
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 |
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 |
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 |
Earnings (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (1.55 | ) |  | $ | 0.09 |  |  | $ | (1.94 | ) |  | $ | 0.12 |
Diluted |  | $ | (1.55 | ) |  | $ | 0.09 |  |  | $ | (1.94 | ) |  | $ | 0.12 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 74.5 |  |  |  | 73.3 |  |  |  | 74.2 |  |  |  | 73.5 |
Diluted |  |  | 74.5 |  |  |  | 74.9 |  |  |  | 74.2 |  |  |  | 76.4 |

See accompanying notes to condensed consolidated financial statements.

4

MYRIAD GENETICS, INC.

AND SUBSIDIARIES

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

(In millions)

|  | Three months ended |  |  | Nine months ended |
|  | March 31, |  |  | March 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Net income (loss) attributable to Myriad Genetics, Inc. stockholders |  | $ | (115.2 | ) |  | $ | 6.9 |  |  | $ | (144.1 | ) |  | $ | 8.8 |
Unrealized gain (loss) on available-for-sale debt securities, net of tax |  |  | (0.1 | ) |  |  | 0.3 |  |  |  | (0.1 | ) |  | $ | 0.7 |
Change in foreign currency translation adjustment, net of tax |  |  | (2.5 | ) |  |  | (1.0 | ) |  |  | (2.4 | ) |  |  | (2.3 | )
Comprehensive income (loss) |  |  | (117.8 | ) |  |  | 6.2 |  |  |  | (146.6 | ) |  |  | 7.2 |
Comprehensive income attributable to non-controlling interest |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Comprehensive income (loss) attributable to Myriad Genetics, Inc. shareholders |  | $ | (117.8 | ) |  | $ | 6.2 |  |  | $ | (146.6 | ) |  | $ | 7.2 |

See accompanying notes to condensed consolidated financial statements.

5

MYRIAD GENETICS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In millions)

|  |  |  |  |  |  |  |  |  | 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 |

See accompanying notes to consolidated financial statements.

6

MYRIAD GENETICS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)

|  | Nine months ended |
|  | March 31, |
|  | 2020 |  |  | 2019 |
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |  |  |
Net income (loss) attributable to Myriad Genetics, Inc. stockholders |  | $ | (144.1 | ) |  |  | 8.8 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 54.3 |  |  |  | 54.6 |
Non-cash interest expense |  |  | 0.3 |  |  |  | 0.3 |
Gain on deconsolidation of subsidiary |  |  | (1.0 | ) |  |  | — |
Gain on disposition of assets |  |  | (0.2 | ) |  |  | (0.9 | )
Share-based compensation expense |  |  | 23.3 |  |  |  | 24.7 |
Deferred income taxes |  |  | (22.9 | ) |  |  | 3.0 |
Unrecognized tax benefits |  |  | 0.6 |  |  |  | (7.3 | )
Impairment of goodwill and intangible assets |  |  | 99.7 |  |  |  | — |
Change in fair value of contingent consideration |  |  | 2.8 |  |  |  | (1.4 | )
Payment of contingent consideration |  |  | — |  |  |  | (1.5 | )
Changes in assets and liabilities: |  |  |  |  |  |  |  |
Prepaid expenses |  |  | 3.5 |  |  |  | 2.0 |
Trade accounts receivable |  |  | 29.5 |  |  |  | (27.0 | )
Other receivables |  |  | 0.9 |  |  |  | (0.4 | )
Inventory |  |  | — |  |  |  | 7.4 |
Prepaid taxes |  |  | (0.3 | ) |  |  | (3.0 | )
Accounts payable |  |  | (2.1 | ) |  |  | (8.1 | )
Accrued liabilities |  |  | (15.4 | ) |  |  | 1.4 |
Deferred revenue |  |  | 1.8 |  |  |  | (0.4 | )
Net cash provided by operating activities |  |  | 30.7 |  |  |  | 52.2 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |  |  |
Capital expenditures |  |  | (7.8 | ) |  |  | (7.2 | )
Acquisitions, net of cash acquired |  |  | — |  |  |  | (278.5 | )
Proceeds from sale of subsidiary |  |  | 21.3 |  |  |  | — |
Purchases of marketable investment securities |  |  | (60.8 | ) |  |  | (57.0 | )
Proceeds from maturities and sales of marketable investment securities |  |  | 56.3 |  |  |  | 51.8 |
Net cash provided by (used in) investing activities |  |  | 9.0 |  |  |  | (290.9 | )
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |  |  |
Net proceeds from common stock issued under share-based compensation plans |  |  | 1.5 |  |  |  | 6.5 |
Payment of contingent consideration recognized at acquisition |  |  | (3.9 | ) |  |  | — |
Net proceeds from revolving credit facility |  |  | — |  |  |  | 340.0 |
Repayment of revolving credit facility |  |  | (8.6 | ) |  |  | (85.0 | )
Fees associated with refinancing of revolving credit facility |  |  | — |  |  |  | (1.4 | )
Repurchase and retirement of common stock |  |  | — |  |  |  | (50.0 | )
Net cash provided by (used in) financing activities |  |  | (11.0 | ) |  |  | 210.1 |
Effect of foreign exchange rates on cash and cash equivalents |  |  | (0.9 | ) |  |  | 2.6 |
Net increase (decrease) in cash and cash equivalents |  |  | 27.8 |  |  |  | (26.0 | )
Cash and cash equivalents at beginning of the period |  |  | 93.2 |  |  |  | 110.9 |
Cash and cash equivalents at end of the period |  | $ | 121.0 |  |  | $ | 84.9 |

See accompanying notes to condensed consolidated financial statements.

7

NOTES TO CONDENSED CONSOLIDATED F INANCIAL STATEMENTS (UNAUDITED)

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

(1) | BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared by Myriad Genetics, Inc. (the “Company” or “Myriad”) 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.

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 results could differ from those estimates.

Reclassifications

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 reclassified to conform to the current period presentation and are included as part of the goodwill and intangible asset impairment charges financial statement line item in the current period.

Recent Accounting Pronouncements

Recently Adopted Standards

In February 2016, the Financial Accounting Standards Board (the “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

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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 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 also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. ASU 2016-13 is effective for fiscal years beginning after December 31, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including 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 its consolidated financial 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 is effective for public entities for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the potential effects of this guidance on its consolidated financial statements.

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(2) | REVENUE

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

|  | Three months ended March 31, |
|  | 2020 |  |  | 2019 |
(In millions) |  | U.S. |  |  | RoW |  |  | Total |  |  | U.S. |  |  | RoW |  |  | Total |
Molecular diagnostic revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hereditary Cancer Testing |  | $ | 81.3 |  |  | $ | 3.9 |  |  | $ | 85.2 |  |  | $ | 114.3 |  |  | $ | 3.3 |  |  | $ | 117.6 |
GeneSight |  |  | 20.4 |  |  |  | — |  |  |  | 20.4 |  |  |  | 29.6 |  |  |  | — |  |  |  | 29.6 |
Prenatal |  |  | 20.2 |  |  |  | 0.1 |  |  |  | 20.3 |  |  |  | 30.6 |  |  |  | — |  |  |  | 30.6 |
Vectra |  |  | 10.5 |  |  |  | — |  |  |  | 10.5 |  |  |  | 11.3 |  |  |  | — |  |  |  | 11.3 |
Prolaris |  |  | 6.8 |  |  |  | — |  |  |  | 6.8 |  |  |  | 6.9 |  |  |  | — |  |  |  | 6.9 |
EndoPredict |  |  | 0.6 |  |  |  | 2.9 |  |  |  | 3.5 |  |  |  | 0.5 |  |  |  | 2.3 |  |  |  | 2.8 |
Other |  |  | 3.6 |  |  |  | 0.2 |  |  |  | 3.8 |  |  |  | 1.5 |  |  |  | 0.2 |  |  |  | 1.7 |
Total molecular diagnostic revenue |  |  | 143.4 |  |  |  | 7.1 |  |  |  | 150.5 |  |  |  | 194.7 |  |  |  | 5.8 |  |  |  | 200.5 |
Pharmaceutical and clinical service revenue |  |  | 9.6 |  |  |  | 3.9 |  |  |  | 13.5 |  |  |  | 9.7 |  |  |  | 6.4 |  |  |  | 16.1 |
Total revenue |  | $ | 153.0 |  |  | $ | 11.0 |  |  | $ | 164.0 |  |  | $ | 204.4 |  |  | $ | 12.2 |  |  | $ | 216.6 |

|  | 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. 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 |

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Myriad Companies generate revenue by performing molecular diagnostic testing and pharmaceutical & clinical services. Revenue from the sale of molecular diagnostic tests and pharmaceutical and clinical services is recorded at the invoiced amount net of any discounts or contractual allowances. 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.

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, 2020, the aggregate amount of the transaction price of such contracts that is allocated to the remaining performance obligations is $4.1.

The Company provides discounts such as self-pay and volume 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 for e.g. sales tax, value added tax etc.

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, no 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 terms have a payback period of less than one year.

During the three and nine months ended March 31, 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 of delivering the tests results was met in prior periods. The changes were 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.

(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 terms of the Merger Agreement, Myriad Merger Sub, Inc., a newly-created wholly-owned subsidiary of the Company, was merged with and into Counsyl, with Counsyl continuing as the surviving corporation and a wholly-owned subsidiary of Myriad. 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 of $405.9, consisting of $278.5 in cash, financed in part by the Amendment to the Facility (see Note 8) and 2,994,251 shares of common stock issued, valued at $127.4. The shares were issued and valued as of July 31, 2018 at a per share market closing price of $42.53. To complete the purchase transaction, the Company incurred approximately $6.8 of acquisition costs, which were recorded as selling, general and administrative expenses in the period incurred.

Of the cash consideration, $5.0 was deposited into an escrow account to fund any post-closing adjustments payable to Myriad based upon differences between the estimated working capital and the actual working capital of Counsyl at closing. The working capital was finalized during the quarter ended December 31, 2018 and $1.1 of the escrow was returned to Myriad as a result of a working capital adjustment which reduced total consideration and goodwill.

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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 |

Identifiable Intangible Assets

Through its acquisition of Counsyl, the Company acquired intangible assets that consisted of developed screening processes with an estimated fair value of $290.0. The fair values of these developed screening processes were estimated using a probability-weighted income approach that discounts expected future cash flows to present value. Under the probability-weighted income approach, the estimated net cash flows from these developed screening processes were discounted using a discount rate of 12.5%, which is based on the estimated internal rate of return for the acquired developed screening processes and represents the rate that market participants may use to value these intangible assets. The Company will amortize these intangible assets on a straight-line basis over their estimated useful lives of 12 years.

Goodwill

The goodwill represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed from Counsyl and is attributable to the benefits expected from combining the Company’s expertise with Counsyl’s technology and customer insights and the opportunity to integrate genetic screening into clinical practice with OBGYNs. Changes in goodwill since the Counsyl acquisition to the balance as of March 31, 2020 are shown below:

|  | 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 |

This goodwill is not deductible for income tax purposes.

Pro Forma Information (Unaudited)

The unaudited pro-forma results presented below include the effects of the Counsyl acquisition as if it had been consummated as of July 1, 2017, with adjustments to give effect to pro forma events that are directly attributable to the acquisition, which includes adjustments related to the amortization of acquired intangible assets, interest income and expense, and depreciation.

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The unaudited pro forma results do not reflect any operating efficiency or potential cost savings that may result from the consolidation of Counsyl. Accordingly, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operation of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations and are not necessarily indicative of results that might have been achieved had the acquisition been consummated as of July 1, 2017.

|  | 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

The Company has classified its debt investment securities as available-for-sale securities. These securities are carried at estimated fair value with unrealized holding gains and losses, net of the related tax effect, included in accumulated other comprehensive loss in stockholders’ equity until realized. Gains and losses on investment security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. The Company’s cash equivalents consist of short-term, highly liquid investments that are readily convertible to known amounts of cash. The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of security at March 31, 2020 and June 30, 2019 were as follows:

|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  |  |  |  |  | unrealized |  |  | unrealized |  |  |  |  |
|  | Amortized |  |  | holding |  |  | holding |  |  | Estimated |
|  | cost |  |  | gains |  |  | losses |  |  | fair value |
At March 31, 2020: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 103.7 |  |  | $ | — |  |  | $ | — |  |  | $ | 103.7 |
Cash equivalents |  |  | 17.3 |  |  |  | — |  |  |  | — |  |  | $ | 17.3 |
Total cash and cash equivalents |  |  | 121.0 |  |  |  | — |  |  |  | — |  |  |  | 121.0 |
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and notes |  |  | 61.0 |  |  |  | 0.2 |  |  |  | (0.2 | ) |  |  | 61.0 |
Municipal bonds |  |  | 19.9 |  |  |  | 0.1 |  |  |  | — |  |  |  | 20.0 |
Federal agency issues |  |  | 5.5 |  |  |  | 0.1 |  |  |  | — |  |  |  | 5.6 |
US government securities |  |  | 16.4 |  |  |  | 0.3 |  |  |  | — |  |  |  | 16.7 |
Total |  | $ | 223.8 |  |  | $ | 0.7 |  |  | $ | (0.2 | ) |  | $ | 224.3 |

|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  |  |  |  |  | unrealized |  |  | unrealized |  |  |  |  |
|  | Amortized |  |  | holding |  |  | holding |  |  | Estimated |
|  | cost |  |  | gains |  |  | losses |  |  | fair value |
At June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 68.7 |  |  | $ | — |  |  | $ | — |  |  | $ | 68.7 |
Cash equivalents |  |  | 24.5 |  |  |  | — |  |  |  | — |  |  |  | 24.5 |
Total cash and cash equivalents |  |  | 93.2 |  |  |  | — |  |  |  | — |  |  |  | 93.2 |
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds and notes |  |  | 64.0 |  |  |  | 0.6 |  |  |  | — |  |  |  | 64.6 |
Municipal bonds |  |  | 15.3 |  |  |  | — |  |  |  | — |  |  |  | 15.3 |
Federal agency issues |  |  | 9.0 |  |  |  | — |  |  |  | — |  |  |  | 9.0 |
US government securities |  |  | 9.7 |  |  |  | — |  |  |  | — |  |  |  | 9.7 |
Total |  | $ | 191.2 |  |  | $ | 0.6 |  |  | $ | — |  |  | $ | 191.8 |

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

|  | Amortized |  |  | Estimated |
|  | cost |  |  | fair value |
Cash |  | $ | 103.7 |  |  | $ | 103.7 |
Cash equivalents |  |  | 17.3 |  |  |  | 17.3 |
Available-for-sale: |  |  |  |  |  |  |  |
Due within one year |  |  | 60.2 |  |  |  | 60.5 |
Due after one year through five years |  |  | 42.6 |  |  |  | 42.8 |
Due after five years |  |  | — |  |  |  | — |
Total |  | $ | 223.8 |  |  | $ | 224.3 |

(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 |

As of March 31, 2020, $19.5 of the balance of property, plant and equipment has been deconsolidated upon the sale of Privatklinik Dr. Robert Schindlbeck GmbH & Co. KG (the “Clinic”). See Note 18 for additional information regarding the sale of the Clinic.

|  | Three months ended |  |  | Nine months ended |
|  | March 31, |  |  | March 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Depreciation expense |  | $ | 2.6 |  |  | $ | 3.1 |  |  | $ | 8.5 |  |  | $ | 10.6 |

(6) | GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company has recorded goodwill of $327.1 from the acquisitions of Counsyl that was completed on July 31, 2018, Assurex that was completed on August 31, 2016, Sividon Diagnostics GmbH (“Sividon”) that was completed on May 31, 2016, Crescendo Bioscience, Inc. that was completed on February 28, 2014 and Rules-Based Medicine, Inc. that was completed on May 31, 2011. Of this goodwill, $270.3 relates to the Company’s diagnostic segment and $56.8 relates to the other segment. The Company previously had recorded goodwill associated with the Clinic that was completed on February 27, 2015. The following summarizes changes to the goodwill balance for the nine months ended March 31, 2020:

|  | 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 |

As a result of the effect of COVID-19 on expected future cash flows and a corresponding decline in market capitalization and enterprise value, the Company performed an interim quantitative impairment review of goodwill for the Assurex, Crescendo Bioscience and Myriad International reporting units as of March 31, 2020. The Company estimated the fair values of each reporting unit using both the market approach, applying a multiple of earnings based on observable multiples for guideline publicly traded companies, and the income approach, discounting future cash flows based on management’s expectations of the current and future operating environment for each reporting unit. The Company corroborated the reasonableness of the estimated reporting unit fair values by reconciling to its enterprise value and market capitalization. Based on this analysis, the Company recognized a goodwill impairment charge of $80.7 related to the goodwill from the Crescendo reporting unit in the third quarter of

14

fiscal year 2020. The Crescendo reporting unit is part of the Company’s diagnostic segment. The calculation of the impairment charge includes substantial fact-based determinations and estimates including weighted average cost of capital, future revenue, profitability, cash flows and fair values of assets and liabilities. The goodwill impairment charge is reflected in g oodwill and intangible asset impairment charges 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 part 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.

Intangible Assets

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:

|  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  |  |  |
|  | Amount |  |  | Amortization |  |  | Net |
At March 31, 2020: |  |  |  |  |  |  |  |  |  |  |  |
Purchased licenses and technologies |  | $ | 814.9 |  |  | $ | (201.8 | ) |  | $ | 613.0 |
Customer relationships |  |  | 4.7 |  |  |  | (4.1 | ) |  |  | 0.5 |
Trademarks |  |  | 3.0 |  |  |  | (1.4 | ) |  |  | 1.7 |
Total amortized intangible assets |  |  | 822.5 |  |  |  | (207.3 | ) |  |  | 615.2 |
In-process research and development |  |  | 4.8 |  |  |  | — |  |  |  | 4.8 |
Total unamortized intangible assets |  |  | 4.8 |  |  |  | — |  |  |  | 4.8 |
Total intangible assets |  | $ | 827.3 |  |  | $ | (207.3 | ) |  | $ | 620.0 |

|  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  |  |  |
|  | Amount |  |  | Amortization |  |  | Net |
At June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |
Purchased licenses and technologies |  | $ | 815.7 |  |  | $ | (156.6 | ) |  | $ | 659.1 |
Customer relationships |  |  | 4.6 |  |  |  | (3.8 | ) |  |  | 0.8 |
Trademarks |  |  | 3.0 |  |  |  | (1.2 | ) |  |  | 1.8 |
Total amortized intangible assets |  |  | 823.3 |  |  |  | (161.6 | ) |  |  | 661.7 |
In-process research and development |  |  | 23.0 |  |  |  | — |  |  |  | 23.0 |
Total unamortized intangible assets |  |  | 23.0 |  |  |  | — |  |  |  | 23.0 |
Total intangible assets |  | $ | 846.3 |  |  | $ | (161.6 | ) |  | $ | 684.7 |

As of March 31, 2020, the Company decided to abandon the development of one of its in-process research and development intangible assets, and as a result the Company recognized a charge of $17.7 in the third quarter of fiscal year 2020, which is reflected in goodwill and intangible asset impairment charges in the Condensed Consolidated Statements of Operations. The in-process research and development intangible asset was reported as part of the Company’s diagnostic segment.

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 |

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(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 |

(8) | LONG-TERM DEBT

On December 23, 2016, the Company entered into a senior secured revolving credit facility (the “Facility”) by and among Myriad, as borrower, with the lenders from time to time party thereto. On July 31, 2018, the Company entered into Amendment No. 1 (the “Amended Facility”) which effects 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 accounted for as a modification pursuant to guidance in ASC 470-50.

Pursuant to the Amended Facility, Myriad 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 current balance of the net long-term debt is $225.2. There are no 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.

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, complete mergers or consolidations, and/or 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, the Company was not in compliance with the leverage covenant related to the Amended Facility. As discussed in Note 19, on May 1, 2020 the Company entered into Amendment No. 2 to the Amended Facility which included a waiver of non-compliance with the leverage covenant through March 31, 2021.

During the nine months ended March 31, 2020, the Company made $8.6 in principal repayments.

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:

|  | March 31, |  |  | June 30, |
|  | 2020 |  |  | 2019 |
Long-term debt |  | $ | 226.6 |  |  | $ | 235.0 |
Long-term debt discount |  |  | (1.4 | ) |  |  | (1.5 | )
Net long-term debt |  | $ | 225.2 |  |  | $ | 233.5 |

(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 |

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The Company previously held two non-contributory defined benefit pension plans for certain Clinic employees. The Company sold the Clinic in February 2020 and as a result the net pension liability was removed upon deconsolidation. See Note 18 for further discussions regarding the sale of the Clinic.

(10) | PREFERRED AND COMMON STOCKHOLDER’S EQUITY

The Company is authorized to issue up to 5.0 shares of preferred stock, par value $0.01 per share. There were no preferred shares outstanding at March 31, 2020.

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

Common shares issued and outstanding

|  | Nine months ended |  |  | Year ended |
|  | March 31, |  |  | June 30, |
|  | 2020 |  |  | 2019 |
Beginning common stock issued and outstanding |  |  | 73.5 |  |  |  | 70.6 |
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 and outstanding at end of period |  |  | 74.5 |  |  |  | 73.5 |

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:

|  | Three months ended |  |  | Nine months ended |
|  | March 31, |  |  | March 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Denominator: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted-average shares outstanding used to compute basic EPS |  |  | 74.5 |  |  |  | 73.3 |  |  |  | 74.2 |  |  |  | 73.5 |
Effect of dilutive shares |  |  | — |  |  |  | 1.6 |  |  |  | — |  |  |  | 2.9 |
Weighted-average shares outstanding and dilutive securities used to compute diluted EPS |  |  | 74.5 |  |  |  | 74.9 |  |  |  | 74.2 |  |  |  | 76.4 |

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 |

Stock Repurchase Program

In June 2016, the Company’s Board of Directors authorized an eighth 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 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, the Company has $110.7 remaining on its current share repurchase authorization.

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The Company uses the par value method of accounting for its stock repurchases. As a result of the stock repurchases, the Company reduced common stock and additional paid-in capital and recorded charges to accumulated deficit. The shares retired, aggregate common stock and additional paid-in capital reductions, and related charges to accumulated deficit for the repurchases for three and nine months ended March 31, 2020 and 2019 were as follows:

|  | 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 Tax Act Cuts and Jobs Act reduces the federal corporate tax rate to 21% for the fiscal 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, 2020 was $(15.9), or approximately 12.1% of pre-tax income compared to income tax benefit of $(3.6), or approximately 109.1% of pre-tax income, for the three months ended March 31, 2019. Income tax expense for the three months ended March 31, 2020 is based on the Company’s estimated annual effective tax rate for the full fiscal year ending June 30, 2020, adjusted by discrete items recognized during the period. For the three months ended March 31, 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 to the tax effect of equity compensation expense and the deduction realized when exercised, released or sold.

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 our fiscal year ending June 30, 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, 2020, no material impact has been recognized. The Company will continue to evaluate the application of any and all provisions through the remainder of the fiscal year.

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

On November 30, 2017, the Company’s shareholders approved the adoption of the 2017 Employee, Director and Consultant Equity Incentive Plan (the “2017 Plan”). On December 5, 2019 the shareholders approved an amendment 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 March 31, 2020, the Company may grant additional shares of common stock under the 2017 Plan with respect to the 0.2 options outstanding under our 2003 Plan and 5.2 options and restricted stock units outstanding under our 2010 Plan, that 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 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

18

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.

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 |

As of March 31, 2020, there was no unrecognized share-based compensation expense related to stock options.

Restricted Stock Units

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

|  | 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 |

As of March 31, 2020, there was $50.3 of total unrecognized share-based compensation expense related to RSUs that will be recognized over a weighted-average period of 2.3 years. This unrecognized compensation expense is equal to the fair value of RSUs expected to vest.

Employee Stock Purchase Plan

The Company 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 have been authorized. Shares are issued under the 2012 Purchase Plan twice yearly at the end of each offering period. As of March 31, 2020, approximately 0.5 shares of common stock are available for issuance under the 2012 Purchase Plan.

Share-Based Compensation Expense

Share-based compensation expense recognized and included in the condensed consolidated statements of income and comprehensive income was allocated as follows:

|  | 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 |

19

(13) | FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of 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). The fair value of contingent consideration related to the Sividon acquisition as well as the long-term debt were categorized as a level 3 liability, as the measurement amount is based primarily on significant inputs not observable in the market. 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 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 full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.

Level 3—unobservable inputs.

All of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. For Level 2 securities, the Company uses a third party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. For Level 3 contingent consideration, the Company reassesses the fair value of expected contingent consideration and the corresponding liability each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected earn out liability. This fair value measurement is considered a Level 3 measurement because the Company estimates projections during the earn out period utilizing various potential pay-out scenarios. Probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn-out itself, the related projections, and the overall business. The contingent earn-out liabilities are classified as a component of long-term and short-term contingent consideration in the Company’s consolidated balance sheets. Changes to the earn-out liabilities are reflected in change in the fair value of contingent consideration in our consolidated statements of operations. Changes to the unobservable inputs could have a material impact on the Company’s financial statements.

The fair value of our long-term debt, which we consider a Level 3 measurement, is estimated using discounted cash flow analyses, based on the Company’s current estimated incremental borrowing rates for similar borrowing arrangements. The fair value of long-term debt is estimated to be $225.3 at March 31, 2020.

During the quarter ended December 31, 2019, there was a triggering event that required the Company to perform an impairment analysis for the Clinic reporting unit. As a result, the Company recognized a $1.3 impairment charge for goodwill. The fair value used to determine the impairment charge, which we consider a Level 3 measurement, was based on the expected sale price of the Clinic from a recent purchase offer.

During the quarter ended March 31, 2020, there was a triggering event that required the Company to perform an impairment analysis for the Crescendo Bioscience reporting unit. As a result, the Company recognized a $80.7 impairment charge for goodwill. We consider the fair value used to determine the impairment charge to be a Level 3 measurement.

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

|  | 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 |

20

(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.

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

|  | 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

The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. As of March 31, 2020, the management of the Company believes any reasonably possible liability that may result from the resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, operating results, or cash flows.

The Company leases certain office spaces and research and development laboratory facilities, vehicles, and office equipment 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 determination of the right-of-use-assets or lease liabilities associated with these leases as 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:

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 |

21

As of March 31, 2020, the weighted average remaining lease term is 5.5 years and the weighted average discount rate used to determine the operating lease liability was 3.87%.

Disclosures related to periods prior to the adoption of ASU 2016-02

The following table summarizes the future minimum lease payments as of June 30, 2019:

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 |

(15) | EMPLOYEE DEFERRED SAVINGS PLAN

The Company has a deferred savings plan which qualifies under Section 401(k) of the Internal Revenue Code. Substantially all of the Company’s U.S. employees are covered by the plan. The Company makes matching contributions of 50% of each employee’s contribution with the employer’s contribution not to exceed 4% of the employee’s compensation. Subsequent to the quarter ended March 31, 2020, the Company temporarily suspended its matching contributions. The Company recorded contributions to the plan as follows:

|  | 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

The Company’s business is 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.

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

|  | Diagnostics |  |  | Other |  |  | Total |
Three months ended March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 150.5 |  |  | $ | 13.5 |  |  | $ | 164.0 |
Depreciation and amortization |  |  | 16.8 |  |  |  | 1.1 |  |  |  | 17.9 |
Segment operating income (loss) |  |  | (93.6 | ) |  |  | (40.1 | ) |  |  | (133.7 | )
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 |

22

|  | 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

|  | 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

On February 28, 2020, the Company closed the sale of the Clinic with Landkreis Starnberg. As 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 income in the Company’s Condensed Consolidated Statements of Operations. The gain recorded consists of 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, based on the rapid increase in exposure globally.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude 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 evolution 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.

23

CARES Act

The CARES Act was enacted on March 27, 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.

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.

24

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

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 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 earnings 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 s ubmitted 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.

25

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

26

|  | 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,

27

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.

28

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 | )% |  |  |  |

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 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.

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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:

|  | 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 |

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.

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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”.

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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: the risk that we will be unable to pay, when due, amounts due under our creditor 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, 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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk during the nine months ended March 31, 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, 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

During the nine months ended March 31, 2020, we implemented changes to our processes in response to the adoption of Accounting Standards Update No. 2016-02 “Lease (Topic 842)” that became effective July 1, 2019. The operating effectiveness of these changes will be evaluated as part of our annual assessment of the effectiveness of internal controls over financial reporting.

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

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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, Assurex Health, Inc. 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 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 year ended June 30, 2019.

Our financial condition and results of operations have been and continue to be adversely affected by the ongoing coronavirus outbreak.

Any outbreak of contagious diseases, such as COVID-19, or other adverse public health developments, could have a material and adverse effect on our business operations. Such adverse effects could include diversion or prioritization of healthcare resources away from the conduct of genetic testing, disruptions or restrictions on the ability of laboratories to process our tests, and delays or difficulties

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in patients accessing our tests, including those resulting from an inability to travel as a result of quarantines or other restrictions resulting from COVID-19. Beginning 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 the accessibility of our tests to patients. We are unable to predict how long the decline in our testing volumes will continue.

As COVID-19 continues to affect individuals and businesses around the globe, we will likely experience additional disruptions that could severely impact our business, including:

| • | further decreased volume 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 adverse effect on our business and financial condition.

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

Issuer Purchases of Equity Securities

In June 2016, we announced that our Board of Directors had authorized us to repurchase an additional $200.0 million of our outstanding common stock. In connection with our most recent stock repurchase authorization, we have been 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 under our stock repurchase programs during the three months ended March 31, 2020, are as follows:

|  | (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.

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Item 5. Other Information.

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, 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 | Amendment No. 2, dated May 1, 2020, to the Credit Agreement, dated December 23, 2016, among the Registrant and the lenders from time to time party thereto, and as amended July 31, 2018.
31.1 | Certification 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 | 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 | Inline XBRL Taxonomy Extension Schema Document
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, has been formatted in Inline XBRL.

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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, 2020 |  | By: | /s/ R. Bryan Riggsbee
|  |  | R. Bryan Riggsbee
|  |  | Interim President and Chief Executive Officer,
|  |  | Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)

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