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What changed in MYRIAD GENETICS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MYRIAD GENETICS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+526 added−478 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-28)

Top changes in MYRIAD GENETICS INC's 2025 10-K

526 paragraphs added · 478 removed · 347 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

133 edited+54 added−42 removed150 unchanged
Biggest changeWe believe key industry trends include the following: • accelerating shifts in consumer engagement, early detection, home-based care models, the rise of low-cost sequencing, telemedicine, and virtual care; • demand for high-quality, clinically validated diagnostics that support early detection and targeted treatment strategies; • expanding access to genetic insights, particularly among underserved populations with increased focus on health equity, reducing disparities in health care outcomes, and ensuring increased access for challenged communities; • broader, more innovative use of large data sets and analytics; • rapid technological advancements in automation and sequencing platforms, enabling scalable models for diagnostic testing, reducing costs, and enhancing operational efficiency; • enhancements from artificial intelligence to automate image analysis, prior authorization, laboratory testing, and data interpretation, designed to increase speed and accuracy of testing; • increasing adoption of biomarker laws on a state-by-state basis, which we expect will result in more growth and adoption of genetic testing by clinicians and acceptance by local reimbursement agencies; and • growth in personalized medicine and the interest in new partnership models with academic and biopharma partners to advance companion diagnostics and serve patients with specific treatments based on their own genetic makeup and biology.
Biggest changeWe believe key industry trends include the following: • acceleration of personalized, preventive, and home-based care models supported by advances in telemedicine, remote monitoring, and digital engagement; • growing consumer demand for clinically validated and accessible genetic testing solutions that support early detection, therapy selection, and proactive disease prevention; • increased focus on health equity and inclusion, driving access to genetic insights across ancestries and underserved populations, supported by payor and policy initiatives; • broader use of large-scale data and analytics to enhance clinical interpretation, evidence generation, and biopharma collaboration opportunities; • rapid adoption of low-cost sequencing and automation technologies that are enhancing scalability, reducing turnaround times, and enabling broader access to testing; • integration of artificial intelligence (AI) across laboratory operations, prior authorization, image analysis, and data interpretation to enhance efficiency, speed, and accuracy; • expansion of biomarker legislation across multiple U.S. states, supporting payor adoption and clinical use of genetic and molecular diagnostic tests; and • growth in precision medicine and companion diagnostics partnerships between diagnostic companies, academic institutions, and biopharma, advancing targeted treatment approaches.
Human Capital Management As a leader in molecular diagnostic testing and precision medicine, our mission is to advance health and well-being for all by helping people take control of their health and enabling healthcare providers to better detect, treat and prevent disease.
Human Capital Management As a leader in molecular diagnostic testing and precision medicine, our mission is to advance health and well-being for all by helping people take control of their health and enabling healthcare providers to better prevent, detect, and treat disease.
These pending and issued patents have terms expected to begin expiring in 2032. Claims relating to systems and methods for detecting genetic sequences. Prequel Prenatal Screen We own or hold a license to one or more issued patents and pending patent applications in the U.S. and other jurisdictions that relate to laboratory and informatic methods used to enhance Prequel testing.
Prequel Prenatal Screen We own or hold a license to one or more issued patents and pending patent applications in the U.S. and other jurisdictions that relate to laboratory and informatic methods used to enhance Prequel testing. These pending and issued patents have terms expected to begin expiring in 2032. Claims relating to systems and methods for detecting genetic sequences.
Failure to comply with the applicable laws and regulations can subject us to repayment of amounts previously paid to us, significant civil and criminal penalties, loss of licensure, certification, or accreditation, or exclusion from state and federal health care programs. The significant areas of regulation are summarized below.
Failure to comply with the applicable laws and regulations can subject us to repayment of amounts previously paid to us, significant civil and criminal penalties, loss of licensure, certification, or accreditation, or exclusion from state and federal health care programs. The significant areas of regulation applicable to us are summarized below.
For instance, Washington state recently passed the “My Health My Data” Act, which will regulate “consumer health data,” which is defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data” Act provides exemptions for personal data used or shared in connection with certain research activities, including data subject to 45 C.F.R.
For instance, Washington state passed the “My Health My Data” Act, which will regulate “consumer health data,” which is defined as “personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health.” The “My Health My Data” Act provides exemptions for personal data used or shared in connection with certain research activities, including data subject to 45 C.F.R.
We believe that engaging with providers and patients throughout their consumer or patient journey will better enable us to execute our strategies and fulfill our mission. We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services.
We believe that engaging with providers and patients throughout their consumer and patient journey will better enable us to execute our strategies and fulfill our mission. We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services.
Manufacturers must report data for the previous calendar year by the 90th day of the then-current calendar year. CMS then publishes the data on a publicly available website no later than June 30. There are also state “sunshine” laws that require manufacturers to provide reports to state governments on pricing and marketing information.
Manufacturers must report data for the previous calendar year by the 90th day of the then-current calendar year. CMS then publishes the data on a publicly available website no later than June 30. There are also state “sunshine” laws that require device manufacturers to provide reports to state governments on pricing and marketing information.
We also offer the SneakPeek Early Gender DNA Test which predicts a baby's fetal sex as early as six weeks into pregnancy. We compete with multiple companies, including large national reference laboratories, specialty laboratories, academic/university laboratories, and kit-based products with our MyRisk, Foresight, Prequel and SneakPeek tests.
We also offer the SneakPeek Early Gender DNA Test which predicts a baby's fetal sex as early as six weeks into pregnancy. We compete with multiple companies, including large national reference laboratories, specialty laboratories, academic/university laboratories, and kit-based products with our MyRisk, FirstGene, Foresight, Prequel and SneakPeek tests.
Companion diagnostic IVDs may also be reviewed by the competent medicinal product authorities, usually the European Medicines Agency, as part of a consultation process that will be part of the conformity assessment procedure. There will also be a greater emphasis on post-market surveillance and submission of post-market performance follow-up reports.
Companion diagnostic IVDs may also be reviewed by the competent medicinal product authorities, usually the European Medicines Agency, as part of a consultation process that will be part of the conformity assessment procedure. There is also a greater emphasis on post-market surveillance and submission of post-market performance follow-up reports.
Unlike the Directive, which specifies certain requirements that must be achieved by each Member State and permits each Member State to decide how to transpose the Directive into national law to meet those requirements, the IVDR has direct binding legal force throughout every Member State without the need for national implementation.
Unlike the Directive, which specifies certain requirements that must be achieved by each Member State and permits each Member State to decide how to transpose the Directive into national law to meet those requirements, the IVDR has direct binding legal force throughout every EU Member State without the need for national implementation.
We focus our efforts in the following key areas where we have specialized products, capabilities, and expertise: Oncology: Clarifying cancer risk and cancer treatment with genetic insights and companion diagnostic tests that are designed to work with corresponding drugs and treatments.
We focus our efforts in the following key areas where we have specialized products, capabilities, and expertise: Oncology: Clarifying cancer risk and cancer treatment with genetic and genomic insights and companion diagnostic tests that are designed to work with corresponding drugs and treatments.
We continue to recycle plastics used in our laboratory facilities. Our new laboratories in west Salt Lake City, Utah and South San Francisco, California include energy and water efficiency and other environmental-friendly features.
We continue to recycle plastics used in our laboratory facilities. Our laboratories in West Salt Lake City, Utah and South San Francisco, California include energy and water efficiency and other environmental-friendly features.
Our MyRisk test is designed to determine a patient’s hereditary cancer risk for breast, ovarian, uterine, renal, colorectal, endometrial, melanoma, pancreatic, prostate, skin, and gastric cancers. The test analyzes 48 separate genes to look for deleterious mutations that put a patient at a substantially higher risk than the general population for developing 11 different types of hereditary cancer.
Our MyRisk test is designed to determine a patient’s hereditary cancer risk for breast, ovarian, uterine, renal, colorectal, endometrial, melanoma, pancreatic, prostate, skin, and gastric cancers. The test analyzes 63 separate genes to look for deleterious mutations that put a patient at a substantially higher risk than the general population for developing 11 different types of hereditary cancer.
For certain types of tests known as laboratory developed tests (LDTs)—which are in vitro diagnostic tests that are designed, manufactured and used within a single laboratory—FDA regulation is less clear than for IVDs. Historically, the FDA had exercised enforcement discretion for LDTs, meaning that the FDA generally did not enforce premarket review and other applicable FDA requirements.
For certain types of tests known as laboratory developed tests (LDTs)—which are in vitro diagnostic tests that are designed, manufactured and used within a single laboratory—FDA regulation is less clear than for IVDs. Historically, the FDA has exercised enforcement discretion for LDTs, meaning that the FDA generally did not enforce premarket review and other applicable FDA requirements.
The Prolaris test was developed to improve physicians’ ability to predict disease outcome and thereby to optimize patient treatment. EndoPredict ® Breast Cancer Prognostic Test : RNA expression test for assessing the aggressiveness of breast cancer. The EndoPredict laboratory developed test is a next-generation RNA expression test used to determine which women with breast cancer may benefit from chemotherapy.
The Prolaris test is designed to improve physicians' ability to predict disease outcome and thereby to optimize patient treatment. EndoPredict ® Breast Cancer Prognostic Test : RNA expression test for assessing the aggressiveness of breast cancer. The EndoPredict laboratory developed test is a next-generation RNA expression test used to determine which women with breast cancer may benefit from chemotherapy.
Our competitors in this market include Genomind, Tempus, Quest Diagnostics Incorporated, and Laboratory Corporation of America Holdings. Key opportunities to maintain our leadership position and grow our business in this market include increasing awareness of pharmacogenomic opportunities for mental health treatment and driving physician adoption and utilization of our product to help guide treatment options.
Our competitors in this market include Genomind, Tempus AI, Inc., Quest Diagnostics Incorporated, and Laboratory Corporation of America Holdings. Key opportunities to maintain our leadership position and grow our business in this market include increasing awareness of pharmacogenomic opportunities for mental health treatment and driving physician adoption and utilization of our product to help guide treatment options.
Claims relating to systems and methods for preparing enriched DNA fractions, detecting circulating tumor DNA, and identifying tumor variants. SneakPeek We own one or more issued patents and pending patent applications in the U.S. or other jurisdictions relating to SneakPeek testing. These pending and issued patents have terms expected to begin expiring in 2040.
These pending and issued patents have terms expected to begin expiring in 2037. Claims relating to systems and methods for preparing enriched DNA fractions, detecting circulating tumor DNA, and identifying tumor variants. SneakPeek We own one or more issued patents and pending patent applications in the U.S. or other jurisdictions relating to SneakPeek testing.
Our competitors in women's health include Natera, Inc., Laboratory Corporation of America Holdings, Quest Diagnostics Incorporated, BillionToOne, Inc., Tempus AI, Inc., and Peekaboo Early Detection Gender DNA Test. We compete mainly based on our test breadth and accuracy, equity in care capability, and our commercial scale.
Our competitors in women's health include Natera, Inc., Laboratory Corporation of America Holdings, Quest Diagnostics Incorporated, BillionToOne, Inc., Tempus AI, Inc., Fulgent Genetics, Inc., and Peekaboo Early Detection Gender DNA Test. We compete mainly based on our test breadth and accuracy, equity in care capability, and our commercial scale.
Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good. One of our key human capital metrics is employee turnover. For the year ended December 31, 2024, our global voluntary employee turnover rate was 10%.
Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good. One of our key human capital metrics is employee turnover. For the year ended December 31, 2025, our global voluntary employee turnover rate was 10% .
We include our website address in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our website. 27 Table of Contents
We include our website address in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our website. 26 Table of Contents
In the event of a breach, even if we mitigate harm and make required reports on a timely basis, we may still be subject to penalties for the underlying breach. 22 Table of Contents Other federal and state laws establish additional requirements for protecting the privacy and security of health information that is not protected by HIPAA.
In the event of a breach, even if we mitigate harm and make required reports on a timely basis, we may still be subject to penalties for the underlying breach. Other federal and state laws establish additional requirements for protecting the privacy and security of health information that is not protected by HIPAA.
Given the many uncertainties built into PAMA’s price-setting process, we cannot predict how payments we receive under the CLFS, and thus our revenue, may change from year to year. 24 Table of Contents The No Surprises Act was signed into law on December 27, 2020, as part of the Consolidated Appropriations Act, 2021.
Given the many uncertainties built into PAMA’s price-setting process, we cannot predict how payments we receive under the CLFS, and thus our revenue, may change from year to year. The No Surprises Act was signed into law on December 27, 2020, as part of the Consolidated Appropriations Act, 2021.
All 48 genes in the panel are well documented in clinical literature for the role they play in hereditary cancer and have been shown to have actionable clinical interventions for the patient to facilitate earlier cancer detection, lower disease risk, or reduce risk of cancer recurrence.
All 63 genes in the expanded panel are well documented in clinical literature for the role they play in hereditary cancer and have been shown to have actionable clinical interventions for the patient to facilitate earlier cancer detection, lower disease risk, or reduce risk of cancer recurrence.
Caring and Belonging : Our objective is to make Myriad a place where all employees have a sense of belonging. Myriad supports a culture of caring and inclusion aligned with our company mission, vision, and values to drive company performance by creating opportunities and experiences for learning, development, and a sense of belonging for all employees.
Caring and Belonging : Our objective is to make Myriad a place where all employees have a sense of belonging. We foster a culture of caring and inclusion aligned with our company mission, vision, and values to drive company performance by creating opportunities and experiences for learning, development, and a sense of belonging for all employees.
Among other things, the IVDR introduces a new risk-based classification for IVDs and specifies CDx and genetic tests as Class C products (second highest risk). Under the IVDR, Class C IVDs require assessment by a Notified Body for certification and audit of the manufacturer's quality management system (QMS) before they can be placed on the market.
Among other things, the IVDR introduced a new risk-based classification for IVDs and classified CDx and genetic tests as Class C products (second highest risk). Under the IVDR, Class C IVDs require assessment by a Notified Body for certification and audit of the manufacturer's quality management system (QMS) before they can be placed on the market.
The FDA can also initiate reclassification of an existing device type on its own initiative, and it recently issued a final rule to clarify the administrative process through which the agency reclassifies a medical device.
The FDA can also initiate reclassification of an existing device type on its own initiative, and it has previously issued a final rule to clarify the administrative process through which the agency reclassifies a medical device.
In addition, by investing in technology-enabled commercial tools, new laboratory facilities, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.
In addition, by investing in technology-enabled commercial tools, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.
We also provide an expansive benefit offering including medical, dental and vision health care coverage, insurance and disability coverage, 401(k) investment plans with Company matching, tax advantaged savings accounts, paid time off and leaves of absence, parental leave, family formation benefits, employee assistance programs, including free mental health resources for employees and their dependents, community outreach programs, training and development opportunities, and wellness programs.
We also provide an expansive and evolving benefit offering including medical, dental and vision health care coverage, insurance and disability coverage, 401(k) investment plans with Company matching, tax advantaged savings accounts, paid time off and leaves of absence, parental leave, family formation benefits, employee assistance programs, including free mental health resources for employees and their dependents, preventative health screening, community outreach programs, and wellness programs.
The penalties for violating the CMP Law include exclusion, substantial fines, and payment of up to three times the amount billed, depending on the nature of the offense. Other U.S.
The penalties for violating the CMP Law include exclusion, substantial fines, and payment of up to three times the amount billed, depending on the nature of the offense. 25 Table of Contents Other U.S.
We have seven employee-led resource groups (ERGs) that represent and support diverse communities in our workforce. Our active ERG communities provide a safe space for teammates from shared backgrounds and their allies to connect, communicate and support each other.
We have eight employee-led resource groups (ERGs) that represent and support diverse communities in our workforce. Our active ERG communities provide a safe space for teammates from shared backgrounds and their allies to connect, learn together, communicate and support each other.
The results are reviewed by our Board of Directors, the Compensation and Human Capital Committee, and senior leadership, who analyze areas of progress or deterioration and prioritize actions and activities in response to this feedback to drive meaningful improvements in employee engagement.
The results are reviewed by our Board of Directors and senior leadership, who analyze areas of progress or deterioration and prioritize actions and activities in response to this feedback to drive meaningful improvements in employee engagement.
We cannot predict what if any additional regulatory changes will occur or how they will affect our current or future products. 18 Table of Contents Premarket Approval The PMA process is more complex, costly and time consuming than the 510(k) process.
We cannot predict what, if any, additional regulatory changes will occur or how they may affect our current or future products. Premarket Approval The PMA process is more complex, costly and time consuming than the 510(k) process.
The corporate responsibility programs at Myriad align with a clearly defined set of strategic priorities including the following: • Patient Assistance : We are working to improve overall health care quality and increase access to diagnostic testing for those in need by offering robust financial assistance. • Advocacy : We collaborate with patient advocacy and support organizations where we believe we can make a positive difference in addressing complex health challenges, provide education about diagnostic testing, and improve the quality of life for patients. • Sustainability : As described further below, we continue to explore ways in which we can minimize our environmental impacts. • Scholarship : We provide financial support for academic scholarships and contribute to advancing education and training for women and minorities in medicine and science. • Philanthropy : We provide financial support to nonprofit organizations and share the expertise of our employees in the communities where we operate.
Our corporate responsibility programs align with a clearly defined set of strategic priorities including the following: • Patient Assistance : We are working to improve overall health care quality and increase access to diagnostic testing for those in need by offering robust financial assistance. • Advocacy : We collaborate with patient advocacy and support organizations where we believe we can make a positive difference in addressing complex health challenges, provide education about diagnostic testing, and improve the quality of life for patients. • Sustainability : As described further below, we continue to explore ways in which we can minimize our environmental impacts. • Philanthropy : We provide financial support to nonprofit organizations and share the expertise of our employees in the communities where we operate.
The Nominating and Governance Committee of our Board of Directors is responsible for reviewing and evaluating our environmental, climate, safety, social and other corporate responsibility strategies, practices, and initiatives. In connection with our 2023-2024 Quality, Innovation, and Corporate Responsibility Report, we disclosed our Scope 1 and Scope 2 emissions data.
The Nominating and Governance Committee of our Board of Directors is responsible for reviewing and evaluating our health, safety, climate, sustainability, and other corporate responsibility strategies, practices, and initiatives. In connection with our Quality, Innovation, and Corporate Responsibility Report, we disclosed our Scope 1 and Scope 2 emissions data.
As of December 31, 2024, approximately 64% of our employees were women, and women held 39% of Myriad leadership roles (vice president and above). Approximately one third of the members of our Board of Directors are women, including the chairperson, and 44% of the members of our Board of Directors come from diverse gender, ethnic, and cultural backgrounds.
As of December 31, 2025, approximately 65% of our employees were women, and women held 35% of Myriad leadership roles (vice president and above). Approximately one third of the members of our Board of Directors are women, including the chairperson, and 44% of the members of our Board of Directors come from diverse gender, ethnic, and cultural backgrounds.
Significant revisions to Japanese regulations of medical devices, IVDs and other health care products are ongoing. The first round of changes to Japan’s Pharmaceuticals and Medical Devices Act took effect September 1, 2020 and August 2021.
Significant revisions to Japanese regulations of medical devices, IVDs, and other health care products are ongoing. The first round of changes to Japan’s PMDA took effect in September 2020 and August 2021.
The MyRisk Genetic Test Result and MyRisk Management Tool ® summarize medical society guidelines for managing a patient with a genetic mutation in view of their personal and family history of cancer. MyRisk also includes RiskScore ® for all ancestries.
The MyRisk Genetic Test Result and MyRisk Management Tool ® summarize medical society guidelines for managing a patient with a genetic mutation in view of their personal and family history of cancer.
To support these objectives and help our employees balance their work and personal lives, we maintain a flexible work environment and competitive compensation and benefits programs. As of December 31, 2024, we have approximately 2,700 full-time equivalent employees. Most of our employees are engaged directly in sales and marketing, production, customer experience, billing, administration, technology, development, and research.
To support these objectives and help our employees balance professional and personal demands, we maintain a flexible work environment and competitive compensation and benefits programs. As of December 31, 2025, we had approximately 2,700 full-time equivalent employees. Our employees are engaged directly in sales and marketing, production, customer experience, billing, administration, technology, development, and research.
The same series of laws discussed above modified the phase-in of payment reductions resulting from private payor rate implementation so that a 0.0 percent reduction limit was applied for calendar years 2021 through 2024. The Further Continuing Appropriations and Extensions Act, 2025 further applied a 0.0 percent reduction limit for calendar year 2025.
The same series of laws discussed above modified the phase-in of payment reductions resulting from private payor rate implementation so that a 0.0 percent reduction limit was applied for calendar years 2021 through 2024.
Patients, healthcare providers, payors, and health systems are looking to apply the power of genetic insights, molecular diagnostics, and precision medicine to advance care, improve access, and lower costs.
Patients, healthcare providers, payors, and health systems are increasingly leveraging the power of genetic insights, molecular diagnostics, and precision medicine to personalize care, improve access, and lower costs.
For the years ended December 31, 2024, 2023, and 2022, we incurred research and development expense of $113.4 million, $88.7 million, and $85.4 million, respectively. 8 Table of Contents Industry and Competition Healthcare is evolving to be more patient-centered and value-based.
For the years ended December 31, 2025, 2024, and 2023, we incurred research and development expense of $106.8 million, $113.4 million, and $88.7 million, respectively. 9 Table of Contents Industry and Competition Healthcare continues to evolve to be more patient-centered and value-based.
We believe the success of our mission depends, in part, on our ability to attract and retain qualified personnel. Our key human capital management objectives are to recruit, retain, and motivate the exceptional people needed to carry out our mission.
We believe the success of our mission depends, in part, on our ability to attract, retain and motivate highly skilled and qualified personnel who share our values and commitment to innovation. Our key human capital management objectives are to recruit, retain, and inspire the exceptional people needed to carry out our mission and strategy.
These issued patents are expected to begin expiring on the respective dates noted below and any related applications, if issued as patents and depending on term adjustments or terminal disclaimers, if applicable, are expected to have similar expiration timeframes. These patents and applications contain multiple claims including but not limited to those claims described below.
These issued patents are expected to begin expiring on the respective dates noted below and any related applications, if issued as patents and depending on term adjustments or terminal disclaimers, if applicable, are expected to have similar expiration timeframes.
Typically, we use outside vendors who are contractually obligated to comply with applicable laws and regulations to dispose of such waste.
Typically, we use outside vendors who are contractually obligated to comply with applicable laws and regulations to dispose of such waste. These vendors are licensed or otherwise qualified to handle and dispose of such waste.
Consequently, payment may not be reduced by more than 15 percent per year for calendar years 2026 through 2028 as compared to the payment amount established for a test the prior year.
Consequently, payment may not be reduced by more than 15 percent per year from January 31, 2027 through December 31, 2028 as compared to the payment amount established for a test the prior year.
These pending and issued patents have terms expected to begin expiring in 2032. Claims relating to systems and methods for detecting genetic sequences. MRD We own one or more issued patents and pending patent applications in the U.S. or other jurisdictions relating to MRD testing. These pending and issued patents have terms expected to begin expiring in 2037.
Foresight Carrier Screen We own one or more issued patents and pending patent applications in the U.S. and other jurisdictions that relate to laboratory and informatic methods used to enhance Foresight testing. These pending and issued patents have terms expected to begin expiring in 2032. Claims relating to systems and methods for detecting genetic sequences.
We believe that we are in material compliance with CLIA and all applicable licensing laws and regulations. 16 Table of Contents Food and Drug Administration In the United States, in vitro diagnostic (IVD) products are subject to regulation by the FDA as medical devices to the extent that they are intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease.
Food and Drug Administration In the United States, in vitro diagnostic (IVD) products are subject to regulation by the FDA as medical devices to the extent that they are intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease.
Sustainability We strive to do business in ways that protect both the health and safety of our employees and the world in which we operate by establishing, promoting, maintaining, and improving a culture of sustainability and environmental responsibility. Our Myriad Green Team engages employees across our business in environmental activities and events that benefit local communities.
Sustainability We strive to do business in ways that protect both the health and safety of our employees and the world in which we operate by establishing, promoting, maintaining, and improving a culture of sustainability and environmental responsibility.
Claims relating to methods of improving the accuracy of fetal sex determination by reducing a level of contaminating DNA in a blood sample from a pregnant human subject and/or methods of detecting target fetal nucleic acids in a sample.
These pending and issued patents have terms expected to begin expiring in 2040. Claims relating to methods of improving the accuracy of fetal sex determination by reducing a level of contaminating DNA in a blood sample from a pregnant human subject and/or methods of detecting target fetal nucleic acids in a sample.
In addition, device manufacturers are required to register their establishments and list their devices with the FDA and are subject to periodic inspections by the FDA and certain state agencies.
Until then, manufacturers are required to comply with the QSR. 19 Table of Contents In addition, device manufacturers are required to register their establishments and list their devices with the FDA and are subject to periodic inspections by the FDA and certain state agencies.
The revision in May 2022 created the fast track approval of IVDs conditional or time-limited approval in emergency situations when the efficacy of medical product is presumed, subject to safety confirmation.
A further revision in May 2022 introduced a fast-track approval pathway for IVDs, allowing conditional or time-limited approval in emergency situations where the efficacy of medical product is presumed, subject to confirmation of safety.
These ERGs are designed to mentor, foster, encourage, and inspire employees in all stages of their careers by providing access to senior leadership, peer groups, mentoring, and other valuable resources to help them pursue their career ambitions.
These ERGs are designed to mentor, develop, foster, encourage, and inspire employees in all stages of their careers by providing access to senior leadership, peer groups, mentoring, education, and other valuable resources to help employees achieve their career aspirations and strengthen inclusion company-wide.
Additional International Regulation We market, directly or through distributors, some of our tests outside of the United States and are subject to foreign regulatory requirements governing laboratory licensure, human clinical testing, use of tissue, privacy and data security, and marketing approval for our tests.
These revisions will take effect within six months to two years, depending on the relevant provision. Additional International Regulation We market, directly or through distributors, some of our tests outside of the United States and are subject to foreign regulatory requirements governing laboratory licensure, human clinical testing, use of tissue, privacy and data security, and marketing approval for our tests.
Our expanded Foresight screening test aligns with the American College of Medical Genetics and Genomics (ACMG) guidelines, which recommend offering expanded carrier screening to individuals who are pregnant or considering pregnancy.
The expanded Foresight test screens for carrier status of up to 274 genes associated with serious and prevalent inherited conditions. Our expanded Foresight screening test aligns with the American College of Medical Genetics and Genomics (ACMG) guidelines, which recommend offering expanded carrier screening to individuals who are pregnant or considering pregnancy.
As part of our long-term growth strategy, we plan to increase our investment in R&D in 2025 to drive innovation and new product development and enhance clinical evidence generation through clinical studies. These initiatives align with our commitment to improving diagnostic accuracy, expanding our test portfolio, and strengthening our position in precision medicine.
As part of our long-term growth strategy, we expect R&D investment in 2026 to increase with a focus on the Cancer Care Continuum, which will support innovation, new product development and clinical evidence generation through clinical studies. These initiatives align with our commitment to improving diagnostic accuracy, expanding our test portfolio, and strengthening our position in precision medicine.
Loss of a laboratory’s CLIA certificate or state license may also result in the inability to receive payments from state and federal health care programs as well as private third-party payors.
Loss of a laboratory’s CLIA certificate or state license may also result in the inability to receive payments from state and federal health care programs as well as private third-party payors. We believe that we are in material compliance with CLIA and all applicable licensing laws and regulations.
These vendors are licensed or otherwise qualified to handle and dispose of such waste. 26 Table of Contents In addition, our advertising for laboratory tests using FDA-cleared or approved IVDs as well as LDTs that are not FDA-approved is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission (FTC), as well as certain state laws.
In addition, our advertising for laboratory tests using FDA-cleared or approved IVDs as well as LDTs that are not FDA-approved is subject to federal truth-in-advertising laws enforced by the Federal Trade Commission (FTC), as well as certain state laws.
MyChoice ® CDx Companion Diagnostic Test : tumor test that determines homologous recombination deficiency (HRD) status in patients with ovarian cancer. This FDA-approved test helps provide information on the magnitude of benefit for PARP inhibitor therapy.
MyChoice ® CDx Companion Diagnostic Test : tumor test that determines homologous recombination deficiency (HRD) status in patients with ovarian and endometrial cancers. This FDA-approved test, with clinical utility validated in more than 20,000 patients across multiple tumor types , helps provide information on the magnitude of benefit for PARP inhibitor therapy.
To that end, the FDA has also issued draft guidance entitled “Principles for Codevelopment of an In Vitro Companion Diagnostic Device with a Therapeutic Product” to serve as a practical guide to assist therapeutic product sponsors and IVD sponsors in developing a therapeutic product and an accompanying IVD companion diagnostic.
To that end, the FDA has also issued draft guidance entitled “Principles for Codevelopment of an In Vitro Companion Diagnostic Device with a Therapeutic Product” to serve as a practical guide to assist therapeutic product sponsors and IVD sponsors in developing a therapeutic product and an accompanying IVD companion diagnostic. 18 Table of Contents The FDA has indicated that it will apply a risk-based approach to determine the regulatory pathway for IVD companion diagnostic devices, as it does with all medical devices.
Under the Directive, the majority of IVDs could be placed on the market as a result of the manufacturer self-certifying the IVD as being in conformity with the essential requirements, without the involvement of a Notified Body. 20 Table of Contents The Directive was replaced by the Regulation (EU) 2017/746 of the European Parliament and of the Council on in vitro diagnostic medical devices (IVDR) that entered into force in May 2017, and which initially included a 5-year period until its original effective date of May 26, 2022, plus some transition provisions for IVDs already on the market.
The Directive was replaced by the Regulation (EU) 2017/746 of the European Parliament and of the Council on in vitro diagnostic medical devices (IVDR) that entered into force in May 2017, and which initially included a 5-year period until its original effective date of May 26, 2022, plus some transition provisions for IVDs already on the market.
Research has also shown that with prior knowledge of recessive genetic conditions, 76% of patients took preventive actions such as in-vitro fertilization with pre-implantation genetic testing to reduce the risk of having an affected offspring.
Research has also shown that with prior knowledge of recessive genetic conditions, 76% of patients took preventive actions such as in-vitro fertilization with pre-implantation genetic testing to reduce the risk of having an affected offspring. FirstGene ® Multiple Prenatal Screen: a comprehensive prenatal genetic risk assessment test currently available through early access in a large clinical study.
In addition, Nevada recently enacted a consumer health data privacy bill, SB 370, which also regulates “consumer health data” and shares many similarities with Washington’s “My Health My Data” Act, and Connecticut recently amended its comprehensive privacy law to include heightened regulation of “consumer health data.” Additional states may adopt health-specific privacy laws that could impact our business activities and our collection and handling of health-related data.
In addition, Nevada enacted a consumer health data privacy bill, SB 370, which also regulates “consumer health data” and shares many similarities with Washington’s “My Health My Data” Act, Connecticut amended its comprehensive privacy law to include heightened regulation of “consumer health data,” and Texas amended its comprehensive privacy law to include heightened regulation of biometric and genetic data.
HRD status is determined using two independent methods: BRCA1 and BRCA2 status that encompasses sequence variants and large rearrangements, and Genomic Instability Status encompassing loss of heterozygosity, telomeric allelic imbalance, and large-scale state transitions across the entire genome. We believe that the combination of these methods is a more comprehensive way to measure HRD status, versus either one alone.
HRD status is determined using two independent methods: (i) BRCA1 and BRCA2 statuses that encompasses sequence variants and large rearrangements, and (ii) Genomic Instability Status encompassing loss of heterozygosity, telomeric allelic imbalance, and large-scale state transitions across the entire genome.
Other factors that complicate billing include: • variability in coverage and information requirements among various payors; • patient financial assistance programs; • missing, incomplete or inaccurate billing information provided by ordering physicians; • billings to payors with whom we do not have contracts; • disputes with payors as to which party is responsible for payment; and • disputes with payors as to the appropriate level of reimbursement. 23 Table of Contents Depending on the reimbursement arrangement and applicable law, the party that reimburses us for our tests may be: • a third party who provides coverage to the patient, such as an MCO; • a state or federal health care program; or • the patient.
Other factors that complicate billing include: • variability in coverage and information requirements among various payors; • patient financial assistance programs; • missing, incomplete or inaccurate billing information provided by ordering physicians; • billings to payors with whom we do not have contracts; • disputes with payors as to which party is responsible for payment; and • disputes with payors as to the appropriate level of reimbursement.
Transparency Laws and Regulations A federal law known as the Physician Payments Sunshine Act requires medical device manufacturers to track and report to CMS certain payments and other transfers of value made to covered recipients, which include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse-midwives who are not bona fide employees of the manufacturer, as well as teaching hospitals, and ownership or investment interests held by physicians and their immediate family members.
Compliance with health information privacy and security statutes and regulations, including genetic testing and genetic information privacy laws in all jurisdictions, both state and federal, can be challenging as these laws often change, overlap and conflict and we may not be able to maintain compliance in all jurisdictions where we do business. 22 Table of Contents Transparency Laws and Regulations A federal law known as the Physician Payments Sunshine Act requires medical device manufacturers to track and report to CMS certain payments and other transfers of value made to covered recipients, which include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse-midwives who are not bona fide employees of the manufacturer, as well as teaching hospitals, and ownership or investment interests held by physicians and their immediate family members.
Further, there is no agency guidance and little court precedent to indicate how and to what extent EKRA will be applied and enforced. 25 Table of Contents Physician Self-Referral Bans The federal ban on physician self-referrals, commonly known as the Stark Law, prohibits, subject to certain exceptions, physician referrals of Medicare patients to an entity providing certain designated health services, which include laboratory services, if the physician or an immediate family member of the physician has any financial relationship with the entity.
Physician Self-Referral Bans The federal ban on physician self-referrals, commonly known as the Stark Law, prohibits, subject to certain exceptions, physician referrals of Medicare patients to an entity providing certain designated health services, which include laboratory services, if the physician or an immediate family member of the physician has any financial relationship with the entity.
Test Patent Assets Expiration Claims Prolaris Prostate Cancer Prognostic Test We own one or more issued patents and pending patent applications in the U.S. and other jurisdictions relating to Prolaris testing. These pending and issued patents have terms expected to begin expiring in 2030.
FirstGene Multiple Prenatal Screen We own one or more issued patents and pending patent applications in the U.S. and other jurisdictions relating to FirstGene testing. These pending and issued patents have terms expected to begin expiring in 2032.
In addition, others may obtain patents having claims which cover aspects of our tests or processes which are necessary for or useful to the development, use or performance of our products. Should any other group obtain patent protection with respect to our discoveries, our commercialization of our tests could be limited or prohibited.
In addition, others may obtain patents having claims which cover aspects of our tests or processes which are necessary for or useful to the development, use or performance of our products.
Pharmacogenomics: Leveraging pharmacogenomics to help clinicians understand how genetics may impact patient metabolism and response to antidepressants and other mental health medications. 5 Table of Contents The following tests are included in the key areas outlined above: Oncology Women's Health Pharmacogenomics MyRisk MyRisk GeneSight BRACAnalysis CDx Prequel MyChoice CDx Foresight Prolaris SneakPeek EndoPredict Precise Tumor Descriptions of our tests are as follows: MyRisk™ Hereditary Cancer Test : DNA sequencing test for assessing the risks for hereditary cancers.
The following tests are included in the key areas outlined above: Oncology Women's Health Mental Health MyRisk MyRisk GeneSight BRACAnalysis CDx Prequel MyChoice CDx Foresight Prolaris FirstGene EndoPredict SneakPeek Precise Tumor Precise MRD Descriptions of our tests are as follows: MyRisk ® Hereditary Cancer Test : DNA sequencing test for assessing the risks for hereditary cancers.
AMPLIFY is a NIPS technology that substantially reduces low fetal fraction test failures in order to allow for equity in care across all patients, regardless of body mass index (BMI), race, or ethnicity. Enabled by its AMPLIFY™ technology, Prequel is the first prenatal cell-free DNA (cfDNA) screen available at eight-weeks gestational age.
AMPLIFY is a NIPS technology that substantially reduces low fetal fraction test failures in order to allow for equity in care across all patients, regardless of body mass index (BMI), race, or ethnicity.
We describe whether and how risks related to our intellectual property have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading " Risks Related to Our Intellectual Property ", included in Part I, Item 1A of this Annual Report on Form 10-K. 14 Table of Contents License Agreements We are a party to license agreements which give us the rights to use certain technologies in the research, development, testing processes, and commercialization of our tests.
Should any other group obtain patent protection with respect to our discoveries, our commercialization of our tests could be limited or prohibited. 14 Table of Contents We describe whether and how risks related to our intellectual property have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading " Risks Related to Our Intellectual Property ", included in Part I, Item 1A of this Annual Report on Form 10-K.
IVDs were not subject to pre-market authorization by a National Competent Authority (NCA) under the Directive, but instead had to comply with essential requirements based on conformity with harmonized standards. For certain IVDs, compliance with the essential requirements was subject to assessment by a Notified Body.
IVDs are not subject to pre-market authorization by a National Competent Authority (NCA), but instead have to comply with essential requirements based on conformity with harmonized standards.
It is unknown at this time how the diversity action plan may affect clinical trial planning or what specific information the FDA will expect in such plans, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial.
It is unknown at this time how the diversity action plan may affect clinical trial planning or what specific information the FDA will expect in such plans, but if the FDA objects to a sponsor’s diversity action plan or otherwise requires significant changes to be made, it could delay initiation of the relevant clinical trial. 17 Table of Contents If the FDA determines that the applicant’s device is substantially equivalent to the identified predicate device(s), the agency will issue a 510(k) clearance letter that authorizes commercial marketing of the device for one or more specific indications for use.
Prequel has a low test failure rate at less than 1 in 1,000 patients and has been validated in multiple clinical studies to be highly accurate. Prequel uses AMPLIFY™ technology that raises NIPS test performance most significantly for the types of patients who have traditionally had test failures on standard NIPS tests due to certain clinical factors.
Prequel uses AMPLIFY™ technology that raises NIPS test performance most significantly for the types of patients who have traditionally had test failures on standard NIPS tests due to certain clinical factors.
Anderson Cancer Center (UTMDACC) Exclusive world-wide right to certain rights of UTMDACC in intellectual property relating to our MyChoice HRD testing. We pay UTMDACC a royalty based on net sales of our MyChoice HRD test.
The table below lists important licenses to technologies that are relevant to certain of our tests: Entity Subject Royalties Expiration University of Texas M.D. Anderson Cancer Center (UTMDACC) Exclusive world-wide right to certain rights of UTMDACC in intellectual property relating to our MyChoice HRD testing. We pay UTMDACC a royalty based on net sales of our MyChoice HRD test.
Claims relating to biomarkers, kits, systems and methods for detecting, diagnosing, prognosing and selecting therapy for prostate cancer. MyChoice CDx Companion Diagnostic Test We own or hold a license to one or more issued patents and pending patent applications in the U.S. and other jurisdictions relating to MyChoice CDx testing.
Claims relating to biomarkers, kits, systems and methods for detecting homologous recombination deficiency and selecting therapy based on such detection. GeneSight Psychotropic Mental Health Medication Test We hold a license to one or more issued patents and pending patent applications in the U.S. and other jurisdictions relating to GeneSight testing.
We have or intend to seek patent protection in the United States and major foreign jurisdictions for these and other inventions which we believe are patentable and where we believe our interests would be best served by seeking patent protection. 13 Table of Contents However, any patents issued to us or our licensors may not afford meaningful protection for our products or technology or may be subsequently circumvented, invalidated or narrowed or found unenforceable.
We have or intend to seek patent protection in the United States and major foreign jurisdictions for these and other inventions which we believe are patentable and where we believe our interests would be best served by seeking patent protection.
HIPAA and Other Privacy Laws The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which applies to health plans, healthcare clearing houses, and healthcare providers that conduct certain health care transactions electronically (Covered Entities) contains provisions that address the privacy and security of individually identifiable health information (called “protected health information” under HIPAA), the standardization of identifying numbers used in the healthcare system and the standardization of certain health care transactions.
We are also required to maintain accurate information on and control over sales and distributors’ activities that may fall within the purview of the Foreign Corrupt Practices Act, its books and records provisions and its anti-bribery provisions, as well as the UK Bribery Act and other anti-corruption laws. 21 Table of Contents HIPAA and Other Privacy Laws The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which applies to health plans, healthcare clearing houses, and healthcare providers that conduct certain health care transactions electronically (Covered Entities) contains provisions that address the privacy and security of individually identifiable health information (called “protected health information” under HIPAA), the standardization of identifying numbers used in the healthcare system and the standardization of certain health care transactions.
Since the implementation of this program in 2022, we have consistently maintained a strong NPS above 70, which we believe indicates a high level of user satisfaction and advocacy. This serves as a valuable benchmark for our ongoing efforts to enhance and innovate our offerings to better meet the needs of our patients and clinicians.
Since the implementation of this program in 2022, we have consistently maintained a strong NPS above 70, which we believe indicates a high level of user satisfaction and advocacy. This continues to serve as a key benchmark for our commitment to an excellent patient and provider experience.
We expect that any IVD companion diagnostic device developed for use with drug products will utilize the PMA pathway and that a clinical trial performed under an IDE will have to be completed before the PMA application may be submitted. 19 Table of Contents We are developing companion diagnostic tests for use with drug products in development by pharmaceutical companies, such as our collaborations with pharmaceutical companies on PARP inhibitors for the treatment of ovarian, breast and other cancers.
We expect that any IVD companion diagnostic device developed for use with drug products will utilize the PMA pathway and that a clinical trial performed under an IDE will have to be completed before the PMA application may be submitted.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePotential events or factors that may have a significant impact on our ability to achieve our growth targets and achieve and/or maintain revenue growth and profitability for our business include the following: • the efforts of third-party payors to limit or decrease the amounts that they are willing to pay for our tests, recoup amounts already paid, not cover our tests, or institute burdensome administrative requirements for reimbursement, such as prior authorization requirements; • our ability to execute on our strategic growth plan; • increased costs of reagents and other consumables required for testing; • increased personnel and facility costs; • our inability to hire competent, trained staff, including laboratory directors required to review and approve all reports we issue in our business, and sales personnel; • our inability to obtain necessary equipment or reagents to perform testing; 30 Table of Contents • our inability to increase production capacity to meet demand increases; • our inability to expand into new markets; • increased licensing or royalty costs, and our ability to maintain and enforce the intellectual property rights underlying our tests and services; • changes in intellectual propriety law applicable to our patents or enforcement in the United States and foreign countries; • the expiration of the patents covering our products; • potential obsolescence of our tests; • our inability to obtain or increase commercial acceptance of our tests; • increased competition and loss of market share; • global or local economic conditions; • protectionist laws and business practices, including trade restrictions, tariffs, export controls, quotas and other trade barriers, including China-U.S., Mexico-U.S. and Canada-U.S trade policies; • increased regulatory requirements; and • material litigation costs, settlements, and judgments.
Biggest changePotential events or factors that may have a significant impact on our ability to achieve our growth targets and achieve and/or maintain revenue growth and profitability for our business include the following: • the efforts of third-party payors to limit or decrease the amounts that they are willing to pay for our tests, recoup amounts already paid, not cover our tests, or institute burdensome administrative requirements for reimbursement, such as prior authorization requirements; • our ability to execute on our strategic plan; • increased costs of reagents and other consumables required for testing; • increased personnel and facility costs; • our inability to hire competent, trained staff, including laboratory directors required to review and approve all reports we issue in our business, and sales personnel; 29 Table of Contents • our inability to obtain necessary equipment or reagents to perform testing; • our inability to increase production capacity to meet demand increases; • our inability to expand into new markets; • increased licensing or royalty costs, and our ability to maintain and enforce the intellectual property rights underlying our tests and services; • changes in intellectual propriety law applicable to our patents or enforcement in the United States and foreign countries; • the expiration of the patents covering our products; • potential obsolescence of our tests; • our inability to obtain or increase commercial acceptance of our tests; • increased competition and loss of market share; • global or local economic conditions; • protectionist laws and business practices, including trade restrictions, tariffs, export controls, quotas and other trade barriers, including China-U.S., Mexico-U.S. and Canada-U.S trade policies; • increased regulatory requirements; • material litigation costs, settlements, and judgments; • changes in federal and state legislation that could increase the number of uninsured and under-insured individuals; • our increased investment in research and development, including the possibility that new products may fail to achieve clinical validation, regulatory clearance, or market acceptance; and • our inability to successfully execute our plan to leverage strategic collaborations and biopharma partnerships, which arrangements may not be available on acceptable terms, or at all, delayed, modified, or terminated, any of which could potentially affect our ability to launch or commercialize new testing solutions.
Our future performance and growth depend on the success of our growth plan, including management's ability to execute upon that plan and the ability of our employees to respond quickly and effectively to strategic projects and changes in our operations and business practices.
Our future performance and growth depend on the success of our strategic plan, including management's ability to execute upon that plan and the ability of our employees to respond quickly and effectively to strategic projects and changes in our operations and business practices.
The execution of our strategic growth plan may take longer than anticipated, and we may not realize, in full or part, our anticipated growth targets in our testing volumes and revenue, or such growth may be realized more slowly than anticipated.
The execution of our strategic plan may take longer than anticipated, and we may not realize, in full or part, our anticipated growth targets in our testing volumes and revenue, or such growth may be realized more slowly than anticipated.
We also rely on commercial courier delivery services to transport some of our tests directly to customers and any disruptions in delivery service could adversely affect our ability obtain and process samples in a timely manner and to service our customers. Our financial condition and results of operations could be adversely affected by adverse public health developments.
We also rely on commercial courier delivery services to transport some of our tests directly to customers and any disruptions in delivery service could adversely affect our ability to obtain and process samples in a timely manner and to service our customers. Our financial condition and results of operations could be adversely affected by adverse public health developments.
In addition, our certificate of incorporation and bylaws also contain certain provisions that may make a third-party acquisition of us difficult, including: • a classified Board of Directors, with three classes of directors each serving a staggered three-year term; • the ability of the Board of Directors to issue preferred stock; • a 70% super-majority stockholder vote to amend our bylaws and certain provisions of our certificate of incorporation; • the inability of our stockholders to call a special meeting or act by written consent; • requiring advance notice in accordance with our bylaws for stockholder proposals that can be acted upon at annual stockholder meetings and nomination to our Board of Directors; and • only our Board of Directors can fill vacancies on the Board of Directors.
In addition, our certificate of incorporation and bylaws also contain certain provisions that may make a third-party acquisition of us difficult, including: • a classified Board of Directors, with three classes of directors each serving a staggered three-year term; • the ability of the Board of Directors to issue preferred stock; • a 70% super-majority stockholder vote to amend our bylaws and certain provisions of our certificate of incorporation; • the inability of our stockholders to call a special meeting or act by written consent; • requiring advance notice in accordance with our bylaws for stockholder proposals that can be acted upon at annual stockholder meetings and nomination of directors to our Board of Directors; and • only our Board of Directors can fill vacancies on the Board of Directors.
RISK FACTORS The following is a summary of the principal risks that could adversely affect our business, operations, and financial results: Risks Related to Our Business and Our Strategy • We may not be able to generate sufficient revenue from our existing tests or develop new tests to be profitable. • Our strategic growth plan may not achieve the anticipated results, and we may not be able to achieve or maintain revenue growth or operate our business on a profitable basis. • If the government and other third-party payors fail to provide coverage and adequate payment for our existing and future tests, if any, our revenue and prospects for profitability will be harmed. • If we do not generate sufficient cash flow from operations and are unable to secure additional funding, we may have to reduce our operations. • We are subject to debt covenants that impose operating and financial restrictions on us and if we are not able to comply with them, it could have a material adverse impact on our operations and liquidity. • If our existing capital resources and expected net cash to be generated from sales of our tests is not sufficient for us to maintain our currently planned operations, we may find it necessary to raise additional funding, which may not be available on favorable terms, or at all. • We have been subject to, and in the future may be subject to, securities class action lawsuits and stockholder derivative actions, as well as product or professional liability claims.
RISK FACTORS The following is a summary of the principal risks that could adversely affect our business, operations, and financial results: Risks Related to Our Business and Our Strategy • We may not be able to generate sufficient revenue from our existing tests or develop new tests to be profitable. • Our strategic plan may not achieve the anticipated results, and we may not be able to achieve or maintain revenue growth or operate our business on a profitable basis. • If the government and other third-party payors fail to provide coverage and adequate payment for our existing and future tests, if any, our revenue and prospects for profitability will be harmed. • If we do not generate sufficient cash flow from operations and are unable to secure additional funding, we may have to reduce the scale of our operations. • We are subject to debt covenants that impose operating and financial restrictions on us and if we are not able to comply with them, it could have a material adverse impact on our operations and liquidity. • If our existing capital resources and expected net cash to be generated from sales of our tests is not sufficient for us to maintain our currently planned operations, we may find it necessary to raise additional funding, which may not be available on favorable terms, or at all. • We have been subject to, and in the future may be subject to, securities class action lawsuits and stockholder derivative actions, as well as product or professional liability claims.
Our agreements with our employees generally provide for employment that can be terminated by either party without cause at any time, subject to specified notice requirements. Further, the non-competition provision that certain key employees are subject to may not be enforceable under certain state laws, particularly California, or federal laws or such provisions may be prohibitively expensive to enforce.
Our agreements with our employees generally provide that employment can be terminated by either party without cause at any time, subject to specified notice requirements. Further, the non-competition provision that certain key employees are subject to may not be enforceable under certain state laws, particularly California, or federal laws or such provisions may be prohibitively expensive to enforce.
Such litigation may adversely impact our business, cash position, results of operations or financial condition and divert management's time and attention from our business. 34 Table of Contents In addition, the marketing, sale and use of our tests could subject us to liability for errors in, misunderstandings of, or inappropriate reliance on, information we provide to clinicians, geneticists or patients, and lead to claims against us if someone were to allege that a test failed to perform as it was designed or marketed, if we failed to provide a correct test result to a patient, if we failed to correctly interpret the test results, if we failed to update the test results due to a reclassification of the variants according to new published guidelines, or if the ordering physician or patient were to misinterpret test results or improperly rely on them when making a clinical decision.
Such litigation may adversely impact our business, cash position, results of operations or financial condition and divert management's time and attention from our business. 33 Table of Contents In addition, the marketing, sale and use of our tests could subject us to liability for errors in, misunderstandings of, or inappropriate reliance on, information we provide to clinicians, geneticists or patients, and lead to claims against us if someone were to allege that a test failed to perform as it was designed or marketed, if we failed to provide a correct test result to a patient, if we failed to correctly interpret the test results, if we failed to update the test results due to a reclassification of the variants according to new published guidelines, or if the ordering physician or patient were to misinterpret test results or improperly rely on them when making a clinical decision.
In addition, for any of the foregoing reasons or otherwise, our anticipated timeline to launch new test offerings, such as First Gene, Precise Liquid, and Precise MRD, may not occur at the time we expect, which could negatively impact our ability to gain commercial market acceptance or successfully commercialize any new test offerings.
In addition, for any of the foregoing reasons or otherwise, our anticipated timeline to launch new test offerings, such as First Gene and Precise MRD, may not occur at the time we expect, which could negatively impact our ability to gain commercial market acceptance or successfully commercialize any new test offerings.
Our patent applications may never issue as patents, and the claims of any issued patents may not afford meaningful protection for our technology or tests. In addition, any patents issued to us or our licensors may be challenged, and subsequently narrowed, invalidated or circumvented. Where necessary, we may initiate litigation to enforce our patent or other intellectual property rights.
Our patent applications may never be issued as patents, and the claims of any issued patents may not afford meaningful protection for our technology or tests. In addition, any patents issued to us or our licensors may be challenged, and subsequently narrowed, invalidated or circumvented. Where necessary, we may initiate litigation to enforce our patent or other intellectual property rights.
Our laboratories and the equipment we use to perform our tests would be difficult to replace and may require significant lead time to replace and qualify for use if they become inoperable. Some of our laboratories are located near active earthquake fault lines and in a region affected by wildfires and flooding.
Our laboratories and the equipment we use to perform our tests would be difficult to replace and may require significant lead time to replace and qualify for use if they become inoperable. Some of our laboratories are located near active earthquake fault lines and in a region affected by wildfires, tornadoes, and flooding.
For example, on February 1, 2024, we acquired the Precise Tumor Test, the Precise Liquid Test, and a CLIA certified laboratory from Intermountain Healthcare and on November 1, 2022, we acquired Gateway Genomics, LLC (Gateway), a personal genomics company and developer of consumer genetic tests that gives families genetic insight into their future children.
For example, on February 1, 2024, we acquired the Precise Tumor Test and a CLIA certified laboratory from Intermountain Healthcare and on November 1, 2022, we acquired Gateway Genomics, LLC (Gateway), a personal genomics company and developer of consumer genetic tests that gives families genetic insight into their future children.
FDA regulation of our GeneSight Psychotropic test could be disruptive to our business. As described further above, the FDA has long claimed authority to regulate LDTs but had exercised its “enforcement discretion” to limit enforcement of in vitro diagnostic regulatory requirements on this category of products.
FDA regulation of our GeneSight Psychotropic test could be disruptive to our business. As described further above, the FDA has long claimed authority to regulate LDTs but has exercised its “enforcement discretion” to limit enforcement of in vitro diagnostic regulatory requirements on this category of products.
The impact to reimbursement levels and the number of insured individuals under the ACA may lead to delay in the purchasing decisions of our customers, which may in turn negatively impact our product sales. Further, if reimbursement levels are inadequate, our business and results of operations could be adversely affected.
The impact on reimbursement levels and the number of insured individuals under the ACA may lead to delay in the purchasing decisions of our customers, which may in turn negatively impact our product sales. Further, if reimbursement levels are inadequate, our business and results of operations could be adversely affected.
Our business could be harmed by the loss, suspension, or other restriction on a license, certification, or accreditation, or by the imposition of a fine or penalties, under CLIA, its implementing regulations, or other state, federal and foreign laws and regulations affecting licensure or certification, or by future changes in these laws or regulations.
Our business could be harmed by the loss, suspension, or other restriction of a license, certification, or accreditation, or by the imposition of a fine or penalties, under CLIA, its implementing regulations, or other state, federal and foreign laws and regulations affecting licensure or certification, or by future changes in these laws or regulations.
Risks Related to Government Regulation • If we fail to comply with the complex federal, state, local and foreign laws and regulations that apply to our business, we could suffer consequences that could materially and adversely affect our operating results and financial condition. • Our actual or perceived failure to comply with data protection laws and regulations could lead to complaints, government enforcement actions, private litigation, and/or adverse publicity and could negatively affect our business. • We may from time to time be subject to government investigation(s), the unfavorable outcome of which may have a material adverse effect on our financial condition, results of operations and cash flows. • Changes in health care policy could increase our costs, decrease our revenue and impact sales of and reimbursement for our tests. • Our business could be harmed by the loss, suspension, or other restriction on a license, certification, or accreditation, or by the imposition of a fine or penalties, under CLIA, its implementing regulations, or other state, federal and foreign laws and regulations affecting licensure or certification, or by future changes in these laws or regulations. • Planned changes in the way the FDA regulates tests performed by laboratories like ours will result in delay and/or additional expense in offering our tests and tests that we may develop in the future. • FDA regulation of our GeneSight Psychotropic test could be disruptive to our business. • Companion and complementary diagnostic tests require FDA approval, and we may not be able to secure such approval in a timely manner or at all. • Our companion diagnostic tests are subject to ongoing regulatory compliance obligations and continued regulatory review and the failure to comply with such obligations could result in regulatory enforcement and/or penalties. • Our business involves environmental risks that may result in liability for us.
Risks Related to Government Regulation • If we fail to comply with the complex federal, state, local and foreign laws and regulations that apply to our business, we could suffer consequences that could materially and adversely affect our operating results and financial condition. • Our actual or perceived failure to comply with data protection laws and regulations could lead to complaints, government enforcement actions, private litigation, and/or adverse publicity and could negatively affect our business. • We may from time to time be subject to government investigation(s), the unfavorable outcome of which may have a material adverse effect on our financial condition, results of operations and cash flows. • Changes in health care policy could increase our costs and impact sales of and reimbursement for our tests. • Our business could be harmed by the loss, suspension, or other restriction of a license, certification, or accreditation, or by the imposition of a fine or penalties, under CLIA, its implementing regulations, or other state, federal and foreign laws and regulations affecting licensure or certification, or by future changes in these laws or regulations. • Planned or potential changes in the way the FDA regulates tests performed by laboratories like ours could result in delay and/or additional expense in offering our tests and tests that we may develop in the future. • FDA regulation of our GeneSight Psychotropic test could be disruptive to our business. • Companion and complementary diagnostic tests require FDA approval, and we may not be able to secure such approval in a timely manner or at all. • Our companion diagnostic tests are subject to ongoing regulatory compliance obligations and continued regulatory review and the failure to comply with such obligations could result in regulatory enforcement and/or penalties. • Our business involves environmental risks that may result in liability for us.
We rely on a CLIA-certified facility in Salt Lake City, Utah to perform most of our tests; a CLIA-certified laboratory in South San Francisco, California to perform our Foresight and Prequel tests; a CLIA-certified laboratory in Mason, Ohio to perform our GeneSight test; and a laboratory in San Diego, California to perform our SneakPeek Early Gender DNA test.
We rely on a CLIA-certified facility in Salt Lake City, Utah to perform most of our tests; a CLIA-certified laboratory in South San Francisco, California to perform our Foresight, Prequel and FirstGene tests; a CLIA-certified laboratory in Mason, Ohio to perform our GeneSight test; and a laboratory in San Diego, California to perform our SneakPeek Early Gender DNA test.
Furthermore, the loss of the services of or failure to recruit key scientific and technical personnel and other qualified personnel who are necessary to operate our business would adversely affect our business and it may have a material adverse effect on our business as a whole. 35 Table of Contents We have acquired and we may continue to acquire technologies, assets or other businesses that could cause us to incur significant expense and expose us to a number of unanticipated operational and financial risks, which could adversely affect our financial condition, results of operations and business prospects.
Furthermore, the loss of the services of or failure to recruit key scientific and technical personnel and other qualified personnel who are necessary to operate our business would adversely affect our business and it may have a material adverse effect on our business as a whole. 34 Table of Contents We have acquired and we may continue to acquire technologies, assets or other businesses that could cause us to incur significant expense and expose us to a number of unanticipated operational and financial risks, which could adversely affect our financial condition, results of operations and business prospects.
Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations. 37 Table of Contents While we take steps to detect and remediate vulnerabilities, we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit such vulnerabilities change frequently and are often sophisticated in nature.
Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations. 36 Table of Contents While we take steps to detect and remediate vulnerabilities, we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit such vulnerabilities change frequently and are often sophisticated in nature.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state genetic testing laws, state health information privacy laws and federal and state consumer protection laws govern the collection, use, disclosure and protection of health-related and other personal and protected health information.
In the United States, numerous federal and state laws and regulations, including HIPAA, state data breach notification laws, state genetic testing laws, state health information privacy laws and federal and state consumer protection laws govern the collection, use, disclosure and protection of health-related and other personal and protected health information.
If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our ABL Facility and are unable to secure additional funding, on acceptable terms or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing activities, research and development activities, or other operations, and potentially delay development of our tests in an effort to provide sufficient funds to continue our operations.
If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our Credit Facility and are unable to secure additional funding, on acceptable terms or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing activities, research and development activities, or other operations, and potentially delay development of our tests in an effort to provide sufficient funds to continue our operations.
In addition, any loss of, or the failure to perform by, a single-source supplier could have a disruptive effect on our business, including our ability to perform testing, and could adversely affect our results of operations.
In addition, any loss of, or failure to perform by, a single-source supplier could have a disruptive effect on our business, including our ability to perform testing, and could adversely affect our results of operations.
The implementation of our strategic growth plan has resulted, and is expected to continue to result, in changes to business priorities and operations, capital allocation priorities, operational and organizational structures, and increased demands on management.
The implementation of our strategic plan has resulted, and is expected to continue to result, in changes to business priorities and operations, capital allocation priorities, operational and organizational structures, and increased demands on management.
We may be subject to future claims or investigations under the Federal False Claims Act or a similar state law, and any unfavorable outcome arising from such claims or investigation could have a material adverse effect on our financial condition, results of operations and cash flows. 51 Table of Contents Changes in health care policy could increase our costs, decrease our revenue and impact sales of and reimbursement for our tests.
We may be subject to future claims or investigations under the Federal False Claims Act or a similar state law, and any unfavorable outcome arising from such claims or investigation could have a material adverse effect on our financial condition, results of operations and cash flows. 51 Table of Contents Changes in health care policy could increase our costs and impact sales of and reimbursement for our tests.
While we believe that our existing cash and cash equivalents, future cash flow from operations, and amounts available for borrowing under our ABL Facility (as defined below) will be sufficient to meet our anticipated cash requirements for at least the next 12 months, changes could occur that would consume available capital resources more quickly than we currently expect and we may need or want to raise additional financing.
While we believe that our existing cash and cash equivalents, future cash flow from operations, and amounts available for borrowing under our Credit Facility (as defined below) will be sufficient to meet our anticipated cash requirements for at least the next 12 months, changes could occur that would consume available capital resources more quickly than we currently expect and we may need or want to raise additional financing.
Further, third-party reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in product development. 31 Table of Contents In addition, under PAMA, Medicare reimbursement for any given test is based on the weighted-median of the payments made by private payors for such test, rendering private payor payment levels even more significant.
Further, third-party reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in product development. 30 Table of Contents In addition, under PAMA, Medicare reimbursement for any given test is based on the weighted-median of the payments made by private payors for such test, rendering private payor payment levels even more significant.
These, and potential similar or related litigation, could result in substantial losses and have a material adverse effect on our business, cash position, operating results or financial condition. • An inability to attract and retain experienced and qualified personnel, including key management personnel, could adversely affect our business. • We have acquired and we may continue to acquire technologies, assets or other businesses that could cause us to incur significant expense and expose us to a number of unanticipated operational and financial risks, which could adversely affect our financial condition, results of operations and business prospects. • Failure to comply with laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs. • Security breaches, loss of data and other disruptions, including from cyberattacks and other cybersecurity incidents, could compromise personal, confidential, or other sensitive or proprietary information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation. • If we experience a significant disruption in our information technology systems, or those of third-parties upon which we rely, including cloud-based services, our business operations and financial condition could be adversely affected. • Artificial intelligence introduces emerging risks and challenges to our business. • Each of our tests is processed in a single one of our laboratory facilities, and any loss or prolonged interruption of our ability to use these laboratories or failure to maintain their operation in compliance with applicable regulations would seriously harm our business. • We depend on a limited number of third parties, or, in some cases, single-source suppliers, for equipment, reagents, other supplies, and specimen collection services.
These, and potential similar or related litigation, could result in substantial losses and have a material adverse effect on our business, cash position, operating results or financial condition. • An inability to attract and retain experienced and qualified personnel, including key management personnel, could adversely affect our business. • We have acquired and we may continue to acquire technologies, assets or other businesses that could cause us to incur significant expense and expose us to a number of unanticipated operational and financial risks, which could adversely affect our financial condition, results of operations and business prospects. • We may sell or discontinue certain existing products or services, which may adversely impact our business, results of operations, and financial condition. • Failure to comply with laws and regulations related to submission of claims for our services could result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs and corresponding foreign reimbursement programs. • Security breaches, loss of data and other disruptions, including from cyberattacks and other cybersecurity incidents, could compromise personal, confidential, or other sensitive or proprietary information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation. • If we experience a significant disruption in our information technology systems, or those of third-parties upon which we rely, including cloud-based services, our business operations and financial condition could be adversely affected. • Artificial intelligence introduces emerging risks and challenges to our business. • Each of our tests is processed in a single one of our laboratory facilities, and any loss or prolonged interruption of our ability to use these laboratories or failure to maintain their operation in compliance with applicable regulations would seriously harm our business. • We depend on a limited number of third parties, or, in some cases, single-source suppliers, for equipment, reagents, other supplies, and specimen collection services.
These laws and regulations currently include, among other things: • CLIA and the implementing regulations, which require that laboratories obtain certification from the federal government, and state licensure laws and regulations; • FDA laws and regulations that apply to medical devices such as our companion diagnostics and other IVDs as well as LDTs, following the July 2024 effective date of the agency's LDT final rule; • HIPAA, which imposes comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions; amendments to HIPAA under HITECH, which strengthened and expanded HIPAA privacy and security compliance requirements, increased penalties for violators, extended enforcement authority to state attorneys general and imposed requirements for breach notification; • state laws regulating genetic testing and protecting the privacy of genetic test results, as well as state laws protecting the privacy and security of health information and personal data and mandating reporting of breaches to affected individuals and state regulators; • the federal Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program; • EKRA, which is an all-payor anti-kickback prohibition on, among other things, knowingly and willfully paying or offering any remuneration directly or indirectly to induce a referral of an individual to a clinical laboratory; • the federal physician self-referral prohibition (Stark Law or the Physician Self-Referral Law), which, absent an exception, prohibits a physician from making a Medicare referral for certain designated health services, including clinical laboratory services, if the physician or an immediate family member of the physician has an applicable financial relationship with the entity providing the designated health services; • the federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government; • the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or Medicaid, unless an exception applies; • other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral and fee-splitting, and false claims acts, which may extend to services reimbursable by any third-party payor, including private insurers; • the federal Physician Payments Sunshine Act, which requires medical device manufacturers to track and report to the federal government certain payments and other transfers of value made to physicians, other health care professionals, and teaching hospitals and ownership or investment interests held by physicians and their immediate family members; • Section 216 of the federal Protecting Access to Medicare Act of 2014, which requires CMS to set Medicare rates for clinical laboratory testing based on private payor data reported by applicable laboratories; • the U.S.
These laws and regulations currently include, among other things: • CLIA and the implementing regulations, which require that laboratories obtain certification from the federal government, and state licensure laws and regulations; • FDA laws and regulations that apply to medical devices such as our companion diagnostics and other IVDs as well as LDTs; • HIPAA, which imposes comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions; amendments to HIPAA under HITECH, which strengthened and expanded HIPAA privacy and security compliance requirements, increased penalties for violators, extended enforcement authority to state attorneys general and imposed requirements for breach notification; • state laws regulating genetic testing and protecting the privacy of genetic test results, as well as state laws protecting the privacy and security of health information and personal data and mandating reporting of breaches to affected individuals and state regulators; • the federal Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program; • EKRA, which is an all-payor anti-kickback prohibition on, among other things, knowingly and willfully paying or offering any remuneration directly or indirectly to induce a referral of an individual to a clinical laboratory; • the federal physician self-referral prohibition (Stark Law or the Physician Self-Referral Law), which, absent an exception, prohibits a physician from making a Medicare referral for certain designated health services, including clinical laboratory services, if the physician or an immediate family member of the physician has an applicable financial relationship with the entity providing the designated health services; • the federal False Claims Act, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government; • the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or Medicaid beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or Medicaid, unless an exception applies; • other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral and fee-splitting, and false claims acts, which may extend to services reimbursable by any third-party payor, including private insurers; • the federal Physician Payments Sunshine Act, which requires medical device manufacturers to track and report to the federal government certain payments and other transfers of value made to physicians, other health care professionals, and teaching hospitals and ownership or investment interests held by physicians and their immediate family members; • Section 216 of the federal Protecting Access to Medicare Act of 2014, which requires CMS to set Medicare rates for clinical laboratory testing based on private payor data reported by applicable laboratories; • the U.S.
If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the ABL Facility may become due and payable immediately, which could have a material adverse impact on our operations and liquidity.
If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Credit Facility may become due and payable immediately, which could have a material adverse impact on our operations and liquidity.
Additionally, any disruption, failure, or breach of our IT and communications systems, or those of third-parties upon which we rely, could significantly impact our operations. For instance, if a key third party vendor experiences a cybersecurity incident, it could compromise our data security and lead to financial losses, regulatory penalties, and reputational damage.
Additionally, any disruption, failure, or breach of our information technology and communications systems, or those of third-parties upon which we rely, could significantly impact our operations. For instance, if a key third-party vendor experiences a cybersecurity incident, it could compromise our data security and lead to financial losses, regulatory penalties, and reputational damage.
If these supplies or services become unavailable or are disrupted, then we may not be able to successfully perform our research, operate our business, or perform our tests on a timely basis or at all. • Our international business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States. • Ethical, legal and social concerns related to the use of genetic information could reduce demand for our tests. • We rely on commercial courier delivery services to transport biological materials to our facilities in a timely and cost-efficient manner and if these delivery services are disrupted, our business will be harmed. • Our financial condition and results of operations could be adversely affected by adverse public health developments. • We face risks associated with currency exchange rate fluctuations, which could adversely affect our operating results. • Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition. • Our estimates of actionable market size and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at expected rates. • Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. • Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition. 28 Table of Contents Risks Related to the Development and Commercialization of Our Tests and Test Candidates • Our tests in development may not be clinically effective or may never achieve significant commercial market acceptance and our test offerings that we have recently launched or acquired may not be commercially successful. • If we do not compete effectively with scientific and commercial competitors, we may not be able to successfully commercialize our tests, increase our revenue or achieve and sustain profitability. • If our current research collaborators or scientific advisors terminate their relationships with us or develop relationships with a competitor, our ability to discover genes, proteins, and biomarkers, and to validate and commercialize tests could be adversely affected.
If these supplies or services become unavailable or are disrupted, then we may not be able to successfully perform our research, operate our business, or perform our tests on a timely basis or at all. • Our international business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States. • International trade disputes, including United States trade tariffs and retaliatory tariffs, could adversely impact our business. • Ethical, legal and social concerns related to the use of genetic information could reduce demand for our tests. • We rely on commercial courier delivery services to transport biological materials to our facilities in a timely and cost-efficient manner and if these delivery services are disrupted, our business will be harmed. • Our financial condition and results of operations could be adversely affected by adverse public health developments. • We face risks associated with currency exchange rate fluctuations, which could adversely affect our operating results. • Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition. • Our estimates of actionable market size and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at expected rates. • Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. • Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition. 27 Table of Contents Risks Related to the Development and Commercialization of Our Tests and Test Candidates • Our tests in development may not be clinically effective or may never achieve significant commercial market acceptance and our test offerings that we have recently launched or acquired may not be commercially successful. • If we do not compete effectively with scientific and commercial competitors, we may not be able to successfully commercialize our tests, increase our revenue or achieve and sustain profitability. • If our current research collaborators or scientific advisors terminate their relationships with us or develop relationships with a competitor, our ability to discover genes, proteins, and biomarkers, and to validate and commercialize tests could be adversely affected.
However, the possibility that we might not have been able to continue to offer our Prequel screening test in California had a chilling effect on sales of our Prequel screening test in California. 32 Table of Contents U.S. and foreign governments continue to propose and pass legislation designed to reduce the cost of health care.
However, the possibility that we might not have been able to continue to offer our Prequel screening test in California had a chilling effect on sales of our Prequel screening test in California. 31 Table of Contents U.S. and foreign governments continue to propose and pass legislation designed to reduce the cost of health care.
Covenants in the ABL Facility impose operating and financial restrictions on us. These restrictions may prohibit or place limitations on, among other things, our ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements.
Covenants in the Credit Facility impose operating and financial restrictions on us. These restrictions may prohibit or place limitations on, among other things, our ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements.
Cost control initiatives could decrease the price that we would receive for any tests in the future, which would limit our revenue and profitability. If we do not generate sufficient cash flow from operations and are unable to secure additional funding, we may have to reduce our operations.
Cost control initiatives could decrease the price that we would receive for any tests in the future, which would limit our revenue and profitability. If we do not generate sufficient cash flow from operations and are unable to secure additional funding, we may have to reduce the scale of our operations.
Historically, the FDA had exercised enforcement discretion with respect to most LDTs and generally not required laboratories that furnish LDTs to comply with the agency’s requirements for medical devices (e.g., establishment registration, device listing, quality systems regulations, premarket clearance or premarket approval, and post-market controls).
Historically, the FDA has exercised enforcement discretion with respect to most LDTs and has generally not required laboratories that furnish LDTs to comply with the agency’s requirements for medical devices (e.g., establishment registration, device listing, quality systems regulations, premarket clearance or premarket approval, and post-market controls).
For example, because most of our tests are only utilized once per patient, we will need to sell our products to new patients or develop new tests in order to continue to generate revenue. Our average reimbursement rate per test may also decline, which may cause our revenue to decrease.
For example, because most of our tests are only utilized once per patient, we will need to sell our products to new patients or develop new tests to continue to generate revenue. Our average reimbursement rate per test may also decline, which may cause our revenue to decrease.
Although we determined that our internal controls over financial reporting were effective as of December 31, 2024, we may in the future identify internal control deficiencies that could rise to the level of a material weakness or we may uncover other errors in our financial reporting.
Although we determined that our internal controls over financial reporting were effective as of December 31, 2025, we may identify internal control deficiencies in the future that could rise to the level of a material weakness or we may uncover other errors in our financial reporting.
GDPR is applicable to part of our business and has increased our responsibility and liability in relation to personal data that we process, and we may be required to put in place additional procedures to comply. GDPR is complex and regulatory guidance continues to evolve.
GDPR is applicable to part of our business and has increased our responsibility and liability in relation to personal data that we process, and we may be required to put in place additional procedures to comply. GDPR is complex and regulatory guidance relating to GDPR compliance continues to evolve.
We currently intend to retain any future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the terms of our ABL Facility restrict our ability to pay dividends.
We currently intend to retain any future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, the terms of our Credit Facility restrict our ability to pay dividends.
As of December 31, 2024, our patent portfolio included issued patents owned or licensed by us and numerous patent applications in the United States and other countries with claims protecting our intellectual property rights.
As of December 31, 2025, our patent portfolio included issued patents owned or licensed by us and numerous patent applications in the United States and other countries with claims protecting our intellectual property rights.
Our ability to preserve our trade secrets, proprietary data bases and other intellectual property is also important to our long-term success. If our intellectual property is not adequately protected, competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
Our ability to preserve our trade secrets, proprietary databases and other intellectual property is also important to our long-term success. If our intellectual property is not adequately protected, competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
Our IT and communication systems, and those of third-parties upon which we rely, may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, natural disasters, or other unforeseen events.
Our information technology and communication systems, and those of third-parties upon which we rely, may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors, natural disasters, or other unforeseen events.
If we sell or issue common stock, convertible securities or other equity securities, or common stock is issued pursuant to equity incentive plans, holders of our common stock may be materially diluted. 56 Table of Contents In addition, we may issue common stock or other equity securities in connection with an acquisition or other strategic transaction, which would cause dilution to our existing stockholders.
If we sell or issue common stock, convertible securities or other equity securities, or common stock is issued pursuant to equity incentive plans, holders of our common stock may be materially diluted. In addition, we may issue common stock or other equity securities in connection with an acquisition or other strategic transaction, which would cause dilution to our existing stockholders.
At the same time, stakeholders and regulators have increasingly expressed or pursued opposing views, legislation and investment expectations regarding ESG initiatives, including the enactment or proposal of anti-ESG legislation or policies. We could face criticism for the scope or nature of our ESG initiatives or for making adjustments to these initiatives.
At the same time, certain stakeholders and regulators have increasingly expressed or pursued opposing views, legislation and investment expectations regarding ESG initiatives, including the enactment or proposal of anti-ESG legislation or policies. As such, we could face criticism for the scope or nature of our ESG initiatives or for making adjustments to these initiatives.
Moreover, our competitors may succeed in developing tests that circumvent our technologies or tests. Furthermore, our competitors may succeed in developing technologies or tests that are more effective or less costly than those developed by us or that would render our technologies or tests less competitive or obsolete.
Furthermore, our competitors may succeed in developing technologies or tests that are more effective or less costly than those developed by us or that would render our technologies or tests less competitive or obsolete.
Foreign Corrupt Practice Act, UK Bribery Act, anti-boycott laws and other anti-corruption laws; and • risks related to the disruptions caused by an infectious disease and responses to it. Any of these factors could significantly harm our international operations and, consequently, our revenues, and results of operations.
Foreign Corrupt Practice Act, UK Bribery Act, anti-boycott laws and other anti-corruption laws; and • risks related to the disruptions caused by an infectious disease and responses to it. 40 Table of Contents Any of these factors could significantly harm our international operations and, consequently, our revenues, and results of operations.
Failure to comply with any applicable FDA requirements could trigger a range of enforcement actions by the FDA, including warning letters, civil monetary penalties, injunctions, criminal prosecution, recall or seizure, operating restrictions, partial suspension or total shutdown of operations and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.
Failure to comply with any applicable FDA requirements, or future comparable regulatory regimes, could trigger a range of enforcement actions by the FDA, including warning letters, civil monetary penalties, injunctions, criminal prosecution, recall or seizure, operating restrictions, partial suspension or total shutdown of operations and denial of or challenges to applications for clearance or approval, as well as significant adverse publicity.
The OIG has issued fraud alerts in recent years, including a fraud alert relating to speaker programs in November 2020, that identify certain arrangements between medical device and drug companies and referring physicians as implicating the Anti-Kickback Statute.
The OIG has issued fraud alerts in recent years, including a fraud alert relating to speaker programs in November 2020, that identify certain arrangements between medical device and drug companies as well as clinical laboratories and referring physicians as implicating the Anti-Kickback Statute.
In addition, we could experience delays in product introductions or sales growth while we attempt to develop non-infringing alternatives. 46 Table of Contents We believe that there has been, and may continue to be, significant litigation in the industry regarding patent and other intellectual property rights. For example, on December 21, 2020, Ravgen, Inc.
In addition, we could experience delays in product introductions or sales growth while we attempt to develop non-infringing alternatives. We believe that there has been, and may continue to be, significant litigation in the industry regarding patent and other intellectual property rights. For example, on December 21, 2020, Ravgen, Inc.
Additionally, any operational disruptions from our third party vendors, such as delays in supply chain deliveries, could adversely affect our ability to meet customer demands and maintain business continuity. Artificial intelligence introduces emerging risks and challenges to our business. Artificial intelligence (AI) is increasingly shaping industries worldwide, including life sciences and healthcare.
Additionally, any operational disruptions from our third-party vendors, such as delays in supply chain deliveries, could adversely affect our ability to meet customer demands and maintain business continuity. 38 Table of Contents Artificial intelligence introduces emerging risks and challenges to our business. Artificial intelligence (AI) is increasingly shaping industries worldwide, including life sciences and healthcare.
For example, UnitedHealthcare updated its medical policy for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial and individual exchange benefit plans and certain managed Medicaid plans.
For example, in 2024, UnitedHealthcare updated its medical policy for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange and certain managed Medicaid plans.
During the year ended December 31, 2024, our revenue was not materially impacted due to foreign currency fluctuations, but may be in the future. We may not be able to offset adverse foreign currency impact with increased revenue.
During the year ended December 31, 2025, our revenue was not materially impacted due to foreign currency fluctuations, but it may be in the future. We may not be able to offset adverse foreign currency impact with increased revenue.
For example, we have one third-party payor that represents 18% and 12% of our total accounts receivable balance as of December 31, 2024 and December 31, 2023. If the actual amount of cash collected from this payor differs from our current estimates, our revenue may be materially impacted.
For example, we have one third-party payor that represents 13% and 18% of our total accounts receivable balance as of December 31, 2025 and December 31, 2024. If the actual amount of cash collected from this payor differs from our current estimates, our revenue may be materially impacted.
As of December 31, 2024, we have substantial deferred tax assets related to net operating loss (NOLs) and tax credit carryforwards.
As of December 31, 2025, we have substantial deferred tax assets related to net operating loss (NOLs) and tax credit carryforwards.
In addition, any interruption in our business would result in a loss of goodwill, including damage to our reputation. If our business were interrupted, it would seriously harm our business. We depend on a limited number of third parties, or, in some cases, single-source suppliers, for equipment, reagents, other supplies, and specimen collection services.
In addition, any interruption in our business would result in a loss of goodwill, including damage to our reputation. If our laboratory processes were interrupted, it would seriously harm our business. 39 Table of Contents We depend on a limited number of third parties, or, in some cases, single-source suppliers, for equipment, reagents, other supplies, and specimen collection services.
Furthermore, national GDPR variations, including the fields of clinical study and other health-related information may raise our costs of compliance and result in greater legal risks. Relatedly, following Brexit and the expiry of the Brexit transition period, which ended on December 31, 2020, the EU GDPR has been implemented in the United Kingdom (as the UK GDPR).
Furthermore, national GDPR variations, including the fields of clinical study and other health-related information may raise our costs of compliance and result in greater legal risks. 50 Table of Contents Relatedly, following Brexit and the expiration of the Brexit transition period, which ended on December 31, 2020, the EU GDPR has been implemented in the United Kingdom (as the UK GDPR).
We do not receive reimbursement from third-party payers or payment from patients for many of the tests we perform.
We do not receive reimbursement from third-party payors or payment from patients for many of the tests we perform.
The UK GDPR sits alongside the United Kingdom Data Protection Act 2018 which implements certain derogation in the GDPR into UK law.
The UK GDPR sits alongside the United Kingdom Data Protection Act 2018 which implements certain derogations in the GDPR into UK law.
General Risks and Risks Related to Our Common Stock • Our stock price is highly volatile, and our stock may lose all or a significant part of its value. • If we are unable to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting, our results of operations, our stock price and investor confidence in us could be adversely affected. • Anti-takeover provisions of Delaware law, provisions in our charter and bylaws and re-adoption of our stockholders’ rights plan, or poison pill, could make a third-party acquisition of us difficult. • Future sales and issuances of our common stock would result in dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline. • We do not intend to pay dividends so any returns will be limited to changes in the value of our common stock. • If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. • Increasing scrutiny and evolving expectations from regulators, business partners, investors, and other stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks. • Our certificate of incorporation and our bylaws designate specific state or federal courts as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees. 29 Table of Contents Risks Related to Our Business and Our Strategy We may not be able to generate sufficient revenue from our existing tests or develop new tests to be profitable.
General Risks and Risks Related to Our Common Stock • Our stock price is highly volatile, and our stock may lose all or a significant part of its value. • If we are unable to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting, our results of operations, our stock price and investor confidence in us could be adversely affected. • Anti-takeover provisions of Delaware law, provisions in our charter and bylaws and re-adoption of our stockholders’ rights plan, or poison pill, could make a third-party acquisition of us difficult. • Shareholder activism can have a significant impact on our operations, strategy, and overall performance. • Future sales and issuances of our common stock would result in dilution of the percentage ownership of our stockholders and could cause the price of our common stock to decline. • We do not intend to pay dividends so any returns will be limited to changes in the value of our common stock. • Increasing scrutiny and evolving expectations from regulators, business partners, investors, and other stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks. • Our certificate of incorporation and our bylaws designate specific state or federal courts as the exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees. 28 Table of Contents Risks Related to Our Business and Our Strategy We may not be able to generate sufficient revenue from our existing tests or develop new tests to be profitable.
Increasing scrutiny and evolving expectations from regulators, business partners, investors, and other stakeholders with respect to our environmental, social, and governance, or ESG, practices may impose additional costs on us or expose us to new or additional risks. Companies across many industries are facing increasing scrutiny related to their ESG practices and disclosure.
Increasing scrutiny and evolving expectations from regulators, business partners, investors, and other stakeholders with respect to our environmental, social, and governance, or ESG, practices may impose additional costs on us or expose us to new or additional risks. Companies across many industries have faced increased scrutiny related to their ESG practices and disclosure.
Declines in operating results, divestitures, sustained market declines and other factors that impact the fair value of an asset could result in an impairment of goodwill or intangible assets and, in turn, a charge to net income.
Declines in operating results, divestitures, sustained market declines and other factors that impact the fair value of an asset could result in an impairment of goodwill or intangible assets and, in turn, a charge to net incom e (loss).
We believe that our existing cash and cash equivalents of $102.4 million as of December 31, 2024, our expected cash flow from operations, and our availability to borrow will be sufficient to meet our anticipated cash requirements for at least the next 12 months. However, we base this expectation on our current operating plan, which may change.
We believe that our existing cash and cash equivalents of $149.6 million as of December 31, 2025, our expected cash flow from operations, and our availability to borrow will be sufficient to meet our anticipated cash requirements for at least the next 12 months. However, we base this expectation on our current operating plan, which may change.
To the extent that any disease affects individuals and businesses around the globe, we may experience disruptions from time to time that could severely impact our business, including: • decreased volume of testing as a result of disruptions to health care providers and limitations on the ability of providers to administer tests, including the suspension of non-emergency appointments and services; • disruptions or restrictions on the ability of our customers, our collaborators’, or our suppliers’ personnel to travel, including as a result of shelter-in-place or stay-at-home orders from state and local governments, and 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 tests, and the conduct of our clinical trials, including because of sickness of employees or their families or 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 access.
Any outbreak of contagious disease and related employee absences may strain our workforce and impact our ability to process tests in a timely way due to reduced staff availability. 41 Table of Contents To the extent that any disease affects individuals and businesses around the globe, we may experience disruptions from time to time that could severely impact our business, including: • decreased volume of testing as a result of disruptions to health care providers and limitations on the ability of providers to administer tests, including the suspension of non-emergency appointments and services; • disruptions or restrictions on the ability of our customers, our collaborators’, or our suppliers’ personnel to travel, including as a result of shelter-in-place or stay-at-home orders from state and local governments, and 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 tests, and the conduct of our clinical trials, including because of sickness of employees or their families or 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 access.
In addition, we anticipate that UnitedHealthcare’s recent update to its medical policy for pharmacogenetic testing to no longer cover certain multi-gene panel tests, including our GeneSight test, under it commercial, individual exchange, and certain managed Medicaid plans will negatively impact our revenue, profitability, and cash flow in 2025 and thereafter. 33 Table of Contents We are subject to debt covenants that impose operating and financial restrictions on us and if we are not able to comply with them, it could have a material adverse impact on our operations and liquidity.
In addition, we expect that UnitedHealthcare’s October 2024 update to its medical policy for pharmacogenetic testing to no longer cover certain multi-gene panel tests, including our GeneSight test, under its commercial, individual exchange, and certain managed Medicaid plans will continue to negatively impact our revenue, profitability, and cash flow in 2026 and thereafter. 32 Table of Contents We are subject to debt covenants that impose operating and financial restrictions on us and if we are not able to comply with them, it could have a material adverse impact on our operations and liquidity.
These factors present obstacles to commercial acceptance of our tests, which we would have to spend substantial time and money to overcome, if we can do so at all. Our inability to successfully do so would harm our business.
These factors present obstacles to commercial acceptance of our tests, which we would have to spend substantial time and money to overcome, if we can do so at all.
Our pipeline of new test candidates, such as FirstGene, Precise Liquid, and Precise MRD, are in various stages of development, some of which may take many more years to develop and must undergo extensive clinical validation.
Our pipeline of new test candidates, such as FirstGene, Prolaris with PathomIQ AI, and Precise MRD, are in various stages of development, some of which may take many more years to develop and must undergo extensive clinical validation.
Environmental Protection Agency, heat waves and large storms are likely to become more frequent or more intense with climate change, which could impact our operations. 39 Table of Contents Although we maintain insurance on these facilities, including business interruption insurance, it may not be adequate to protect us from all potential losses if these facilities were damaged or destroyed.
According to the U.S. Environmental Protection Agency, heat waves and large storms are likely to become more frequent or more intense with climate change, which could impact our operations. Although we maintain insurance on these facilities, including business interruption insurance, it may not be adequate to protect us from all potential losses if these facilities were damaged or destroyed.
However, we may not be able to generate sufficient revenue, from our existing tests and launching and commercializing new tests, to be profitable. For the year ended December 31, 2024, our net loss was $127.3 million and we expect to continue to incur net losses in future years.
However, we may not be able to generate sufficient revenue from our existing tests and launching and commercializing new tests to be profitable. For the year ended December 31, 2025, our net loss was $365.9 million and we expect to continue to incur net losses in future years.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; • any of our or our licensors’ patent applications will result in issued patents; • any of our or our licensors’ patents will be valid or enforceable; • any patents issued to us or our licensors and collaborators will provide a basis for commercially viable tests, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or tests that are patentable; • the patents of others will not have an adverse effect on our business; or • our patents or patents that we license from others will survive legal challenges and remain valid and enforceable.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; • any of our or our licensors’ patent applications will result in issued patents; • any of our or our licensors’ patents will be valid or enforceable; • any patents issued to us or our licensors and collaborators will provide a basis for commercially viable tests, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or tests that are patentable; • the patents of others will not have an adverse effect on our business; or • our patents or patents that we license from others will survive legal challenges and remain valid and enforceable. 45 Table of Contents If a third party files a patent application with claims to subject matter we have invented, the U.S.
Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.
Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on the restrictive covenants in any lending facility, including our Credit Facility, our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.
On January 22, 2020, after a multi-year investigation into CBI’s and our alleged conduct, the United States declined to intervene. On January 27, 2020, the State of California likewise filed its notice of declination.
On January 22, 2020, after a multi-year investigation into CBI’s and our alleged conduct, the government declined to intervene in the case. On January 27, 2020, the State of California likewise filed its notice of declination.
Events or factors that may have a significant impact on our business and on the market price of our common stock include the following: • failure to achieve and sustain revenue growth or margins in our business; • failure of any of our recently launched tests and any new test candidates to achieve commercial success; • changes in the structure of healthcare payment systems and changes in governmental or private insurer reimbursement levels for our tests, including UnitedHealthcare's decision to no longer provide coverage for certain multi-gene panel genetic tests, including our GeneSight test, under its commercial, individual exchange, and certain managed Medicaid plans; • introduction of new commercial tests or technological innovations by competitors; • termination of the licenses underlying our tests; • delays or other problems with operating our laboratory facilities; • failure of any of our research and development programs, including the failure to achieve favorable results from our clinical studies or receive sufficient favorable exposure for our tests in peer-reviewed publications; • changes in intellectual property laws or the enforcement, validity or expiration of our patents in the United States and foreign countries; • developments or disputes concerning patents or other proprietary rights involving us directly or otherwise affecting the industry as a whole; • missing or changing the financial guidance we provide; • failure of analysts to initiate or maintain coverage of our company; • negative publicity, including misinformation, about our company, our tests or the industry in which we operate; • changes in the government regulatory approval process for our existing and new tests; • failure to meet estimates or recommendations by securities analysts that cover our common stock; • issuance of new securities analysts reports or changes in estimates or recommendations by securities analysts relating to our common stock or the securities of our competitors; • general perception of, and public concern over the industry and our approved tests and any test candidates; • litigation, including the outcome of existing and new litigation against us; • government and regulatory investigations; • our ability to raise additional funds if and when needed; • future sales or anticipated sales of our common stock by us or our stockholders; • the timing and amount of any repurchases of our common stock; • general market conditions, including as a result of changes in the rate of inflation and interest rates; • potential seasonal slowness in sales, particularly in the quarters ending September 30 and March 31, the effects of which may be difficult to understand during periods of growth; • economic, health care and diagnostic trends, disasters or crises and other external factors; and • period-to-period fluctuations in our financial results.
Events or factors that may have a significant impact on our business and on the market price of our common stock include the following: • failure to achieve and sustain revenue growth or margins in our business; • failure of any of our recently launched tests and any new test candidates to achieve commercial success; • changes in the structure of healthcare payment systems and changes in governmental or private insurer reimbursement levels for our tests; • introduction of new commercial tests or technological innovations by competitors; • termination of the licenses underlying our tests; • delays or other problems with operating our laboratory facilities; • failure of any of our research and development programs, including the failure to achieve favorable results from our clinical studies or receive sufficient favorable exposure for our tests in peer-reviewed publications; • changes in intellectual property laws or the enforcement, validity or expiration of our patents in the United States and foreign countries; • developments or disputes concerning patents or other proprietary rights involving us directly or otherwise affecting the industry as a whole; • missing or changing the financial guidance we provide; • failure of securities or industry analysts to initiate or maintain coverage of our company, publish reports on us regularly, or publish accurate and favorable research, or downgrades of our common stock by such analysts; • removal of our common stock from, or failure to be included in, one or more indexes, or changes in the methodologies of such indexes; • negative publicity, including misinformation, about our company, our tests or the industry in which we operate; • changes in the government regulatory approval process for our existing and new tests; • failure to meet estimates or recommendations by securities analysts that cover our common stock; • issuance of new securities analysts reports or changes in estimates or recommendations by securities analysts relating to our common stock or the securities of our competitors; • general perception of, and public concern over the industry and our approved tests and any test candidates; • litigation, including the outcome of existing and new litigation against us; • government and regulatory investigations; • our ability to raise additional funds if and when needed; • future sales or anticipated sales of our common stock by us or our stockholders; • the timing and amount of any repurchases of our common stock; • general market conditions, including as a result of changes in the rate of inflation and interest rates; • potential seasonal slowness in sales, the effects of which may be difficult to understand during periods of growth; • economic, health care and diagnostic trends, disasters or crises and other external factors; and • period-to-period fluctuations in our financial results.
This impairment expense and any other such charges could have a material adverse effect on our results of operations or financial condition. Our estimates of actionable market size and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at expected rates.
An impairment loss and any other su ch charges, individually or in the aggregate, could have a material adverse effect on our results of operations or financial condition. 42 Table of Contents Our estimates of actionable market size and forecasts of market growth may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at expected rates.
Our IT and communication systems, and those of third-parties upon which we rely, also may experience interruptions, delays or cessations of service or produce errors in connection with system implementation, integration, upgrades or system migration work that takes place from time to time.
Our information technology and communication systems, and those of third-parties upon which we rely, also may experience interruptions, delays or cessations of service or produce errors in connection with system implementation, integration, upgrades or system migration work that takes place from time to time, including with respect to electronic medical record (EMR) integrations.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive position.
In addition, others may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive position.
For example, California was the first of an increasing number of states to enact comprehensive state privacy legislation with the California Consumer Privacy Act (CCPA), which went into effect in January of 2020.
Various U.S. states now regulate the processing of personal information. For example, California was the first of an increasing number of states to enact comprehensive state privacy legislation with the California Consumer Privacy Act (CCPA), which went into effect in January of 2020.
The market price for our common stock has fluctuated significantly since public trading commenced in October 1995, and it is likely that the market price will continue to fluctuate in the future. In the year ended December 31, 2024, our stock price ranged from $12.87 per share to $29.30 per share.
The market price for our common stock has fluctuated significantly since public trading commenced in October 1995, and it is likely that the market price will continue to fluctuate in the future. In the year ended December 31, 2025, our stock price ranged from $3.76 per share to $15.47 per share.
The tests we enhance or develop may not be clinically effective in clinical trials or commercially, or may not ultimately meet our desired target product profile, be offered at acceptable cost and with the test performance metrics necessary to address the relevant clinical need or commercial opportunity.
Our inability to successfully do so would harm our business. 43 Table of Contents The tests we enhance or develop may not be clinically effective in clinical trials or commercially, or may not ultimately meet our desired target product profile, be offered at acceptable cost and with the test performance metrics necessary to address the relevant clinical need or commercial opportunity.
These research collaborators are not our employees. As a result, we have limited control over their activities and, except as otherwise required by our collaboration agreements, can expect only limited amounts of their time to be dedicated to our activities.
We have relationships with research collaborators at academic and other institutions who conduct research at our request. These research collaborators are not our employees. As a result, we have limited control over their activities and, except as otherwise required by our collaboration or research agreements, can expect only limited amounts of their time to be dedicated to our activities.
On May 29, 2024, the ACLA and one of its members filed a complaint against the FDA in the Eastern District of Texas, alleging that the agency does not have authority to promulgate the LDT final rule and seeking to vacate the FDA’s action.
Following issuance of the final rule, the American Clinical Laboratory Association (ACLA) and one of its members filed a complaint against the FDA in the Eastern District of Texas, alleging that the agency does not have authority to promulgate the LDT final rule and seeking to vacate the FDA’s action.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese controls and processes are reviewed periodically and include the following activities: • we monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; • through our policies, practices, and contracts, as applicable, we require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; • we utilize technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, virtual private networks (VPN), Web Application Firewalls (WAF), intrusion detection systems, antivirus and endpoint detection and response software, multi-factor authentication (MFA), data encryption, encrypted backups, vulnerability scanning and patching, email anti-phishing technology, malicious URL and IP filtering, application controls, USB control and threat intelligence services; • our cybersecurity personnel include certified security professionals who are experienced in networks, computer systems, cloud cybersecurity, cybersecurity risk management, incident response, and security awareness training; • we regularly test and monitor our cybersecurity defenses to ensure that they are effective; and • we also conduct security awareness training for all employees to help them identify and mitigate cybersecurity risks. 58 Table of Contents We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the risk factor “ Security breaches, loss of data and other disruptions, including from cyberattacks and other cybersecurity incidents, could compromise personal, confidential, or other sensitive or proprietary information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation ”, included in Part I, Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference into this Item 1C.
Biggest changeThese controls and processes are reviewed periodically and include the following activities: • we monitor emerging data protection laws and implement changes to our processes that are designed to comply with such laws; • through our policies, practices, and contracts, as applicable, we require employees, as well as third parties that provide services on our behalf, to treat confidential information and data with care; 58 Table of Contents • we utilize technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, virtual private networks (VPN), Web Application Firewalls (WAF), intrusion detection systems, antivirus and endpoint detection and response software, multi-factor authentication (MFA), data encryption, encrypted backups, vulnerability scanning and patching, email anti-phishing technology, malicious URL and IP filtering, application controls, USB control and threat intelligence services; • our cybersecurity personnel include certified security professionals who are experienced in networks, computer systems, cloud cybersecurity, cybersecurity risk management, incident response, and security awareness training; • we regularly test and monitor our cybersecurity defenses to ensure that they are effective; and • we also conduct security awareness training for all employees to help them identify and mitigate cybersecurity risks.
We have developed policies, standards, processes, and practices designed to protect our information systems and data from unauthorized access, cybersecurity attacks, and other security incidents. The policies, standards, processes, and practices are implemented and enforced by dedicated IT and cybersecurity professionals.
We have developed policies, standards, processes, and practices designed to protect our information systems and data from unauthorized access, cybersecurity attacks, and other security incidents. The policies, standards, processes, and practices are implemented and enforced by dedicated information technology and cybersecurity professionals.
The Audit and Finance Committee receives regular reports from our Chief Technology Officer and Senior Vice President, Technology - Enterprise IT and Engineering, on, among other things, material cybersecurity threat risks or incidents and developments, assessments of our security program and overall security posture, our incident response plan, and initiatives to strengthen our information security systems and mitigate cybersecurity risks.
The Audit and Finance Committee receive regular reports from our Chief Technology Officer, on, among other things, material cybersecurity threat risks or incidents and developments, assessments of our security program and overall security posture, our incident response plan, and initiatives to strengthen our information security systems and mitigate cybersecurity risks.
As discussed above, our Chief Technology Officer and Senior Vice President, Technology - Enterprise IT and Engineering regularly report to our Audit and Finance Committee about cybersecurity threat risks, among other cybersecurity related matters. 59 Table of Contents
As discussed above, our Chief Technology Officer regularly reports to our Audit and Finance Committee about cybersecurity threat risks, among other cybersecurity related matters.
The plan involves the participation of a security incident response team that includes our Chief Legal Officer, our Privacy Officer, and other senior leaders in finance, communication, human resources, and legal. The plan includes procedures to communicate the incident to management and customers as appropriate and to provide information as required to state and federal law enforcement and regulatory bodies.
The plan involves the participation of a security incident response team that includes our Chief Legal Officer and other senior leaders in finance, information security and technology, communication, human resources, and legal.
Role of Management Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Technology Officer, who is supported by our leaders in Information Technology, Information Security, and IT Security Compliance.
Kumar, regularly report to the Board of Directors on cybersecurity risks and other related matters reviewed by the Audit and Finance Committee. 59 Table of Contents Role of Management Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Technology Officer, who is supported by our leaders in Information Technology, Information Security, and IT Security Compliance.
We generally follow the HITRUST Common Security Framework in our cybersecurity policies, standards, processes, and practices.
Our cybersecurity policies, standards, processes, and practices are generally aligned with the NIST Cybersecurity Framework 2.0 and the HITRUST Common Security Framework.
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Kumar, regularly report to the Board of Directors on cybersecurity risks and other related matters reviewed by the Audit and Finance Committee.
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We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the risk factor “ Security breaches, loss of data and other disruptions, including from cyberattacks and other cybersecurity incidents, could compromise personal, confidential, or other sensitive or proprietary information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation ”, included in Part I, Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference into this Item 1C.
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The plan includes procedures to communicate the incident to management and customers as appropriate and to provide information as required to state and federal law enforcement and regulatory bodies.
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In addition, the Audit and Finance Committee oversees the Tech Oversight Subcommittee, which is charged with monitoring the implementation and progress of key technology transformation initiatives and evaluating the effectiveness and quality of deliverables for significant technology projects, including information technology general controls, improved order management, and revenue cycle enablement, as well as other technology-related initiatives identified by the Board of Directors or the Audit and Finance Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, during 2024, the Company amended the lease for its west Salt Lake City, Utah headquarters to include approximately 63,000 additional square feet in anticipation of future operating needs. The lease has a term of 12 years and ends coterminous with the rest of the lease. The amendment is expected to commence in fiscal year 2026.
Biggest changeIn 2026, we expect to take possession of approximately 63,000 additional square feet of laboratory and office space at our headquarters in anticipation of future operating needs. The lease for the additional space will expire coterminous with the lease for our existing space.
For more information on our leased properties, see Note 13– Leases in the Notes to Consolidated Financial Statements, included in Part II, Item 8 in this Annual Report on Form 10-K.
For more information on our leased properties, see Note 11– Leases in the Notes to Consolidated Financial Statements, included in Part II, Item 8 in this Annual Report on Form 10-K.
Item 2. PROPERTIES Our corporate headquarters is located in west Salt Lake City, Utah, which has approximately 234,000 square feet of laboratory and office space. In early 2025, we plan to complete the transition of our laboratory operations from our legacy facility.
Item 2. PROPERTIES Our corporate headquarters is located in West Salt Lake City, Utah, which has approximately 234,000 square feet of laboratory and office space. In 2025, we completed the transition of our laboratory operations from our legacy facility.
In South San Francisco, California, we currently lease the Walter Gilbert Research and Innovation Center, which has approximately 63,000 square feet of building space dedicated to administration, research and development, and a laboratory for our Women’s Health business. We have largely transitioned our operations from our legacy facility in South San Francisco to the Walter Gilbert Research and Innovation Center.
In South San Francisco, California, we currently lease the Walter Gilbert Research and Innovation Center, which has approximately 63,000 square feet of building space dedicated to administration, research and development, and a laboratory for our prenatal products.
The leases for our South San Francisco facilities have remaining terms of one to ten years, expiring from 2025 through 2033, and provide for renewal options for up to ten additional years. We also lease a space in Mason, Ohio, with approximately 24,000 total square feet, which will expire in August 2029.
The lease for our South San Francisco facility has a remaining term of eight years, expiring in 2033, and provides for renewal options for up to ten additional years. We also lease a space in Mason, Ohio, with approximately 29,000 total square feet, which will expire in August 2029.
The leases for our existing Salt Lake City facilities have remaining terms of one to 14 years, expiring from 2025 through 2038, and provide for renewal options for up to ten additional years.
The lease for our Salt Lake City facility has a remaining term of thirteen years, expiring in 2038, and provides for renewal options for up to ten additional years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS For information regarding certain current legal proceedings, see Note 12– Commitments and Contingencies in the Notes to Consolidated Financial Statements, included in Part II, Item 8 in this Annual Report on Form 10-K. Item 4. MINE SAFETY DISCLOSURES None. 60 Table of Contents PART II
Biggest changeItem 3. LEGAL PROCEEDINGS For information regarding certain current legal proceedings, see Note 10– Commitments and Contingencies in the Notes to Consolidated Financial Statements, included in Part II, Item 8 in this Annual Report on Form 10-K. Item 4. MINE SAFETY DISCLOSURES None. 60 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 60 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 61 Item 6. [Reserved] 62 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 63 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 60 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 61 Item 6. [Reserved] 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 64 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 75 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Myriad Genetics, Inc. 100.00 72.6 101.36 53.29 70.29 50.35 NASDAQ Composite Index (IXIC) 100.00 143.64 174.36 116.65 167.3 215.22 NASDAQ Health Care Index (IXHC) 100.00 130.04 125.43 99.81 106.34 105.42 Note: Information used on the graph was obtained from the CRSP Total Return Indexes, a source believed to be reliable, but we are not responsible for any errors or omission in such information.
Biggest changeWe caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Myriad Genetics, Inc. 100.00 139.61 73.39 96.81 69.35 31.11 Nasdaq Composite Total Return (XCMP) 100.00 122.18 82.43 119.22 154.48 187.14 Nasdaq Biotechnology Total Return (XNBI) 100.00 100.02 89.90 94.03 93.49 99.08 Nasdaq Composite Index (IXIC) 100.00 121.39 81.21 116.47 149.83 180.33 Nasdaq Health Care Index (IXHC) 100.00 96.45 76.75 81.77 81.07 99.39 Note: Information used on the graph was obtained from Nasdaq , a source believed to be reliable, but we are not responsible for any errors or omission in such information. 62 Table of Contents The performance graph shall not be deemed to be incorporated by reference by means of any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act or the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such acts.
The graph lines merely connect year-end values and do not reflect fluctuations between those dates. The comparison assumes $100 was invested on December 31, 2019 in our common stock and in each of the foregoing indices. The comparisons shown in the graph below are based upon historical data.
The graph lines merely connect year-end values and do not reflect fluctuations between those dates. The comparison assumes $100 was invested on December 31, 2020 in our common stock and in each of the foregoing indices. The comparisons shown in the graph below are based upon historical data.
We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. In addition, the terms of our ABL Facility restrict our ability to pay dividends.
We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. In addition, the terms of our Credit Facility restrict our ability to pay dividends.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol "MYGN." Stockholders As of February 21, 2025, there were approximately 88 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol "MYGN." Stockholders As of February 19, 2026, there were approximately 85 holders of record of our common stock.
Unregistered Sales of Securities None. 61 Table of Contents Stock Performance Graph The graph set forth below compares the annual percentage change in our cumulative total stockholder return on our common stock during a period commencing on December 31, 2019 and ending on December 31, 2024 (as measured by dividing (A) the difference between our share price at the end and the beginning of the measurement period by (B) our share price at the beginning of the measurement period) with the cumulative total return of the Nasdaq Composite Index (IXIC) and the Nasdaq Health Care Index (IXHC) during such period.
The graph set forth below compares the annual percentage change in our cumulative total stockholder return on our common stock during a period commencing on December 31, 2020 and ending on December 31, 2025 (as measured by dividing (A) the difference between our share price at the end and the beginning of the measurement period by (B) our share price at the beginning of the measurement period) with the cumulative total return of the XCMP, XNBI, the Nasdaq Composite Index (IXIC) and the Nasdaq Health Care Index (IXHC) during such period.
Removed
The performance graph shall not be deemed to be incorporated by reference by means of any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act or the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such acts.
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Unregistered Sales of Securities None. 61 Table of Contents Stock Performance Graph In 2025, we chose to compare our cumulative total stockholder return with the Nasdaq Composite Total Return Index (XCMP) and the Nasdaq Biotechnology Total Return Index (XNBI) as we believe these indices better align with our business for benchmarking our stock performance.
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The performance graph below presents the indices used in the prior year and the newly selected indices.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table represents the balances of cash, cash equivalents and marketable investment securities as of the dates set forth in the table below: (in millions) December 31, 2024 December 31, 2023 Change Cash and cash equivalents $ 102.4 $ 132.1 $ (29.7) Marketable investment securities — 8.8 (8.8) Cash, cash equivalents and marketable investment securities $ 102.4 $ 140.9 $ (38.5) The decrease in cash, cash equivalents and marketable investment securities as of December 31, 2024 as compared to December 31, 2023 was primarily driven by $8.7 million in cash used by operations, $19.0 million in cash used for capital expenditures, $10.7 million in cash used for the capitalization of internal-use software, and $7.5 million in cash used for the payment of withholding tax for the issuance of common stock, net of proceeds from the issuance of common stock.
Biggest changeThe change in UnitedHealthcare coverage has negatively impacted our Mental Health revenue, profitability, and cash flow in 2025 and we expect that these negative impacts will continue into future periods. 71 Table of Contents The following table represents the balances of cash and cash equivalents as of the dates set forth in the table below: (in millions) December 31, 2025 December 31, 2024 Change Cash and cash equivalents $ 149.6 $ 102.4 $ 47.2 The increase in cash and cash equivalents as of December 31, 2025 as compared to December 31, 2024 was primarily driven by a net increase in cash proceeds from borrowings of $75.9 million partially offset by $27.4 million in cash used for capital expenditures including the capitalization of internal-use software.
Cash collections for certain tests delivered may differ from rates estimated due to changes in the estimated transaction price for contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met, settlements with third-party payors, or as a result of third-party payors disputing our bills or denying payment for tests that we have performed, among other reasons.
Cash collections for certain tests delivered may differ from estimated rates due to changes in the estimated transaction price for contractual adjustments, obtaining updated information from payors and patients that was unknown at the time the performance obligation was met, settlements with third-party payors, or as a result of third-party payors disputing our bills or denying payment for tests that we have performed, among other reasons.
We review our intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Intangible assets are initially recorded at their acquisition date fair value and are subsequently amortized over their useful lives.
Intangible assets are initially recorded at their acquisition date fair value and are subsequently amortized over their useful lives. We review our intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.
Legal settlements related to litigation, including the reversal of a previously expected contingent settlement payment. For more information, see Note 12– Commitments and Contingencies in the Notes to Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K. Goodwill and Long-Lived Asset Impairment Charges.
Legal settlements related to litigation, including the reversal of a previously expected contingent settlement payment. For more information, see Note 10– Commitments and Contingencies in the Notes to Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K. Goodwill and Long-Lived Asset Impairment Charges.
We believe that engaging with providers and patients throughout their consumer or patient journey will better enable us to execute our strategies and fulfill our mission. We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services.
We believe that engaging with providers and patients throughout their consumer and patient journey will better enable us to execute our strategies and fulfill our mission. We believe there are significant growth opportunities in addressing the pressing healthcare needs of patient populations through innovative molecular diagnostic testing and precision medicine solutions and services.
If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our ABL Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations; or delay development of our tests in an effort to provide sufficient funds to continue our operations.
If we do not generate sufficient cash from operations, if our capital resources are consumed more rapidly than expected, or if we no longer have access to additional funds under our Credit Facility and we are unable to secure additional funds on acceptable terms, or at all, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations; or delay development of our tests in an effort to provide sufficient funds to continue our operations.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations provides an overview of our business and 2024 financial highlights and describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting estimates that require significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations provides an overview of our business and 2025 financial highlights and describes principal factors affecting the results of our operations, financial condition and liquidity, as well as our critical accounting estimates that require significant judgment and thus have the most significant potential impact on our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
Discussions of comparisons between the year ended December 31, 2023 and the year ended December 31, 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 28, 2024.
Discussions of comparisons between the year ended December 31, 2024 and the year ended December 31, 2023 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 28, 2025.
Our critical accounting estimates are as follows: • revenue recognition; • intangible assets; • goodwill; and • income taxes. Revenue Recognition . Revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to a customer.
Our critical accounting estimates are as follows: • revenue recognition; • goodwill; • intangible assets; and • income taxes. 72 Table of Contents Revenue Recognition . Revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to a customer.
In addition, we are subject to covenants under our ABL Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing.
In addition, we are subject to covenants under our Credit Facility which could limit our ability to incur additional indebtedness or impact our ability to pursue other financing.
Our tests are designed to analyze genes and their expression levels to assess an individual’s risk for developing disease, determine a patient’s likelihood of responding to a particular drug, assess a patient’s risk of disease progression, identify factors which could lead to serious conditions in pregnancy, or provide other prenatal insights.
Components of Consolidated Operations Revenue . Our tests are designed to analyze genes and their expression levels to assess an individual’s risk for developing disease, determine a patient’s likelihood of responding to a particular drug, assess a patient’s risk of disease progression, identify factors which could lead to serious conditions in pregnancy, or provide other prenatal insights.
In addition, by investing in technology-enabled commercial tools, new laboratory facilities, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.
In addition, by investing in technology-enabled commercial tools, advanced automation, and standardized processes and technology, we believe we will be able to reduce complexity and cost, while enhancing our ability to scale and grow.
While we use the best available information to prepare our cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances. While there are always changes in assumptions to reflect changing business and market conditions, our overall methodology used has remained unchanged.
While we use the best available information to prepare our cash flows and discount rate assumptions, actual future cash flows and/or market conditions could differ significantly resulting in future impairment charges related to recorded goodwill balances. While changes in assumptions will occur to reflect changing business and market conditions, our overall methodology used has remained unchanged.
Other income (expense) includes interest income earned on our cash, cash equivalents, and restricted cash held in short-term interest-bearing accounts; interest expense associated with our debt and amortization of deferred financing costs and original issue discount costs; gains or losses on the sale of assets or businesses; and foreign currency gains and losses, realized gain or loss on marketable securities, and other nonrecurring income and expenses.
Other income (expense) includes interest income earned on our cash, cash equivalents, and restricted cash held in short-term interest-bearing accounts; interest expense associated with our debt and amortization of deferred financing costs and original issue discount costs; gains or losses on the sale of assets or businesses; and foreign currency gains and losses, and other nonrecurring income and expenses.
The discussion and analysis below includes year-to-year comparisons between the year ended December 31, 2024 and the year ended December 31, 2023.
The discussion and analysis below includes year-to-year comparisons between the year ended December 31, 2025 and the year ended December 31, 2024.
Income Tax Expense Years Ended December 31, (in millions) 2024 2023 Change % Change Income tax expense $ 3.8 $ 1.1 $ 2.7 245 % Effective tax rate (3.1) % (0.4) % Our tax rate is the product of a U.S. federal statutory rate of 21.0% and a blended state statutory tax rate of approximately 3.3%.
Income Tax (Benefit) Expense Years Ended December 31, (in millions) 2025 2024 Change % Change Income tax (benefit) expense $ (29.2) $ 3.8 $ (33.0) (868) % Effective tax rate 7.4 % (3.1) % Our tax rate is the product of a U.S. federal statutory rate of 21.0% and a blended state statutory tax rate of approximately 3.3%.
When assessing the total consideration for insurance carriers and patients, revenue is further constrained for estimated refunds. We reserve certain amounts in accrued liabilities in the Consolidated Balance Sheets in anticipation of requests for refunds of payments made previously by insurance carriers, which are accounted for as reductions in revenue in the Consolidated Statements of Operations and Comprehensive Loss.
We reserve certain amounts in Accrued liabilities in the Consolidated Balance Sheets in anticipation of requests for refunds of payments made previously by insurance carriers, which are accounted for as reductions in Revenue in the Consolidated Statements of Operations and Comprehensive Loss.
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 expense for the year ended December 31, 2024 was $3.8 million and our effective tax rate was (3.1)%.
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 year ended December 31, 2025 was $29.2 million and our effective tax rate was 7.4%.
In determining the transaction price, we include an estimate of the expected amount of consideration to be received. We apply 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.
We apply 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. An estimate of transaction price does not include any estimated amount of variable consideration that is constrained.
Income tax expense for the year ended December 31, 2023 was $1.1 million and our effective tax rate was (0.4)%. For the year ended December 31, 2024 and 2023, our recognized effective tax rate differs from the U.S. federal statutory rate primarily due to the recognition of valuation allowances.
Income tax expense for the year ended December 31, 2024 was $3.8 million and our effective tax rate was (3.1)%. For the year ended December 31, 2025, our recognized effective tax rate differs from the U.S. federal statutory rate primarily due to the release of unrecognized tax benefits, recognition of valuation allowances and goodwill impairments.
If an event occurs that would cause a revision to the estimates and assumptions used in analyzing the value of the goodwill, the revision could result in a non-cash impairment charge that could have a material impact on the financial results. As of December 31, 2024 , we have recorded goodwill of $286.3 million on our Consolidated Balance Sheets.
If an event occurs that would cause a revision to the estimates and assumptions used in analyzing the value of the goodwill, the revision could result in a non-cash impairment charge that could have a material impact on our financial results.
The following table represents the Consolidated Cash Flow Statement for the periods presented: Twelve Months Ended December 31, (in millions) 2024 2023 Change Cash flows used in operating activities $ (8.7) $ (110.9) $ 102.2 Cash flows provided by (used in) investing activities (11.9) 31.9 (43.8) Cash flows provided by (used in) financing activities (7.4) 152.9 (160.3) Effect of foreign exchange rates on cash, cash equivalents, and restricted cash (1.0) 0.6 (1.6) Net increase (decrease) in cash, cash equivalents, and restricted cash (29.0) 74.5 (103.5) Cash, cash equivalents, and restricted cash at the beginning of the period 140.9 66.4 74.5 Cash, cash equivalents, and restricted cash at the end of the period $ 111.9 $ 140.9 $ (29.0) 69 Table of Contents Cash Flows from Operating Activities We used $102.2 million less of cash for operating activities for the twelve months ended December 31, 2024 compared to the prior year.
The following table represents the Consolidated Cash Flow Statement for the periods presented: Twelve Months Ended December 31, (in millions) 2025 2024 Change Cash flows provided by (used in) operating activities $ 1.8 $ (8.7) $ 10.5 Cash flows used in investing activities (27.4) (11.9) (15.5) Cash flows provided by (used in) financing activities 64.2 (7.4) 71.6 Effect of foreign exchange rates on cash, cash equivalents, and restricted cash 0.8 (1.0) 1.8 Net increase (decrease) in cash, cash equivalents, and restricted cash 39.4 (29.0) 68.4 Cash, cash equivalents, and restricted cash at the beginning of the period 111.9 140.9 (29.0) Cash, cash equivalents, and restricted cash at the end of the period $ 151.3 $ 111.9 $ 39.4 Cash Flows from Operating Activities Our cash flows from operating activities increased $10.5 million for the twelve months ended December 31, 2025 compared to the prior year.
For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial and individual exchange benefit plans and certain managed Medicaid benefit plans, effective during the first half of 2025.
We have experienced and may continue to experience coverage limitations or denials for many of our products. For example, UnitedHealthcare updated its medical policies for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial, individual exchange and certain managed Medicaid benefit plans, effective during 2025.
Unless otherwise noted, all of the financial information in this Annual Report on Form 10-K is consolidated financial information of the Company. Overview We are a leading molecular diagnostic testing and precision medicine company dedicated to advancing health and well-being for all.
Unless otherwise noted, all of the financial information in this Annual Report on Form 10-K is consolidated financial information of the Company. Overview Myriad Genetics is a leading molecular diagnostics and precision medicine company committed to advancing health and well-being for all. We develop and commercialize molecular tests that help patients and providers uncover genetic insights.
As the carrying value for the developed technology asset exceeded the relative fair value, we recognized an impairment charge of $43.0 million during the year ended December 31, 2024, related to the developed technology intangible asset, which is included in "Goodwill and long-lived asset impairment charges" in the Consolidated Statements of Operations.
As the carrying value for the developed technology intangible asset exceeded the relative fair value, we recognized impairment charges of $71.8 million during the second quarter ended June 30, 2025, which is included in Goodwill and long-lived asset impairment charges in the Consolidated Statements of Operations.
The approach considered projected revenue, including the impact of the change in coverage by UnitedHealthcare, profitability associated with the developed technology, discount rates reflective of the risk-adjusted cost of capital of 10.0% and the expected remaining useful life of the developed technology.
The approach considered projected revenue, profitability associated with the developed technology, a discount rate reflective of the risk-adjusted cost of capital of 17% and the expected remaining useful life of the developed technology.
Liquidity and Capital Resources Our primary sources of liquidity are our cash and cash equivalents, our expected cash flows from operations, and, in certain circumstances as discussed below, amounts available for borrowing under our ABL Facility. As of December 31, 2024, we had cash and cash equivalents of $102.4 million and our availability under the ABL Facility was $56.0 million.
Liquidity and Capital Resources Our primary sources of liquidity are our cash and cash equivalents, our expected cash flows from operations, and, in certain circumstances as discussed below, amounts available for borrowing under our Credit Facility, as defined below.
Those factors include, but are not limited to, changes in tax laws, regulations and/or rates, the results of any future tax examinations, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, past levels of research and development spending, acquisitions, changes in our corporate structure, and changes in overall levels of income before taxes all of which may result in periodic revisions to our provision for income taxes. 72 Table of Contents Developing our provision for income taxes, including our effective tax rate and analysis of potential uncertain tax positions, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and any estimated valuation allowance we deem necessary to offset deferred tax assets.
Those factors include, but are not limited to, changes in tax laws, regulations and/or rates, the results of any future tax examinations, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, past levels of research and development spending, acquisitions, changes in our corporate structure, and changes in overall levels of income before taxes all of which may result in periodic revisions to our provision for income taxes.
Control is transferred, and revenue is recognized, once test results are released to the healthcare provider and/or patient. Revenue from the sale of tests is recorded at the estimated transaction price.
Control is transferred, and revenue is recognized, once test results are released to the healthcare provider and/or patient. Revenue from the sale of tests is recorded at the estimated transaction price. We have the right to bill our customers upon the completion of performance obligations and thus do not record contract assets.
We measured the fair value of the International reporting unit utilizing the market approach and the discounted cash flow method under the income approach. The income approach considered management’s business plans and projections as the basis for expected cash flows and a discount rate reflective of the risk-adjusted cost of capital of 10.5%.
We measured the fair value of the International reporting unit utilizing the market approach and the discounted cash flow method under the income approach. The income approach considered projected revenue and profitability associated with the reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 16.0%.
Income tax expense (benefit) consists of current and deferred components, which include changes in our deferred tax assets, our deferred tax liabilities, and our valuation allowance. 65 Table of Contents Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenue The following table summarizes year-over-year revenue changes in our core product categories: Years ended December 31, % of Total Revenue (in millions) 2024 2023 Change % Change 2024 2023 Hereditary Cancer $ 364.5 $ 327.8 $ 36.7 11 % 44% 44% Tumor Profiling 125.8 135.6 (9.8) (7) % 15% 18% Prenatal 177.1 151.3 25.8 17 % 21% 20% Pharmacogenomics 170.2 138.5 31.7 23 % 20% 18% Total revenue $ 837.6 $ 753.2 $ 84.4 11 % 100% 100% The following table summarizes testing volume changes in our core product categories: Years ended December 31, (in thousands) 2024 2023 % Change Product volumes: Hereditary Cancer 294 281 5% Tumor Profiling 53 59 (10)% Prenatal 666 625 7% Pharmacogenomics 507 459 10% Total 1,520 1,424 7% Revenue for the year ended December 31, 2024 increased $84.4 million compared to the prior year due to an increase in the average revenue per test primarily due to changes in contracted price and operational improvements as well as an increase in testing volume across the majority of our products.
Income tax (benefit) expense consists of current and deferred components, which include changes in our deferred tax assets, our deferred tax liabilities, and our valuation allowance. 67 Table of Contents Results of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue The following table summarizes year-over-year revenue changes in our core product categories: Years ended December 31, % of Total Revenue (in millions) 2025 2024 Change % Change 2025 2024 Hereditary Cancer $ 372.4 $ 364.5 $ 7.9 2 % 45% 44% Tumor Profiling 121.7 125.8 (4.1) (3) % 15% 15% Prenatal 186.3 177.1 9.2 5 % 23% 21% Mental Health 144.1 170.2 (26.1) (15) % 17% 20% Total revenue $ 824.5 $ 837.6 $ (13.1) (2) % 100% 100% The following table summarizes testing volume changes in our core product categories: Years ended December 31, (in thousands) 2025 2024 % Change Product volumes: Hereditary Cancer 315 294 7% Tumor Profiling 48 53 (9)% Prenatal 637 666 (4)% Mental Health 537 507 6% Total 1,537 1,520 1% Revenue for the year ended December 31, 2025 decreased $13.1 million compared to the prior year.
The income approach considered projected revenue and profitability associated with reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 10.5%. The resulting fair value of the Women's Health reporting unit exceeded its carrying value by 82.0%.
The income approach considered projected revenue and profitability associated with each reporting unit and a discount rate reflective of the risk-adjusted cost of capital of 17.0% and 16.0% for the Mental Health and Women's Health reporting units, respectively.
We have significant experience with historical discount patterns and we use this experience to estimate transaction prices. The estimate of revenue is affected by, among other factors, assumptions for changes in payor mix, payor collections, current customer contractual requirements, experience with collections from third-party payors, and changes in medical policies.
The estimate of revenue is affected by, among other factors, assumptions for changes in payor mix, payor collections, current customer contractual requirements, experience with collections from third-party payors, and changes in medical policies. When assessing the total consideration for insurance carriers and patients, revenue is further constrained for estimated refunds.
We performed the recoverability test by comparing the carrying value of the asset group to its estimated undiscounted future cash flows. The analysis indicated that the carrying value exceeded the recoverable amount, requiring us to determine the fair value of the asset group. The fair value of the developed technology was determined using a discounted cash flow model.
The analysis indicated that the carrying value exceeded the recoverable amount for certain of our asset groups, requiring us to determine the fair value of those groups. The fair value of our Mental Health developed technology intangible asset was determined using a discounted cash flow model.
We intend to continue to develop and enhance our products and services to support growth, improve patient and provider experience, and reach more patients of all backgrounds.
We believe these investments in product innovation position us to expand our addressable markets and differentiate our portfolio of testing solutions. We plan to continue to develop and enhance our products and services to support growth, improve patient and provider experience, and reach more patients of all backgrounds.
General and Administrative Expense Years ended December 31, (in millions) 2024 2023 Change % Change General and administrative expense $ 275.9 $ 283.7 $ (7.8) (3) % General and administrative expense as a % of total revenue 32.9 % 37.7 % General and administrative expense decreased by $7.8 million for the year ended December 31, 2024 compared to the prior year primarily due to a $14.8 million decrease in expenses associated with our real estate optimization strategy, including a decrease in depreciation expense, facility costs, and expense associated with a lease termination in the prior year.
General and Administrative Expense Years ended December 31, (in millions) 2025 2024 Change % Change General and administrative expense $ 256.8 $ 275.9 $ (19.1) (7) % General and administrative expense as a % of total revenue 31.1 % 32.9 % General and administrative expense for the year ended December 31, 2025 decreased by $19.1 million compared to the prior year primarily due to a decrease of $9.8 million in amortization for previously impaired intangible assets.
Additionally, for the year ended December 31, 2024, we recognized $3.0 million in revenue due to a retroactive coverage change by a payor for one of our prenatal products. Hereditary Cancer revenues increased $36.7 million due to a 6% increase in the average revenue per test and a 5% increase in testing volume.
For the year ended December 31, 2024, we recognized $21.5 million of revenue for tests in which the performance obligation was met in a prior period, including $3.0 million in revenue due to a retroactive coverage change by a payor for one of our prenatal products.
Our capital deployment strategy focuses on use of resources in the key areas of research and development, technology, and acquisitions. We believe that investing organically through research and development and new product development or acquisitively to support our business strategy provides the best return on invested capital. Our ABL Facility has a total maximum principal commitment of $115.0 million.
We believe that investing organically through research and development and new product development to support our business strategy provides the best return on invested capital.
Our available capital resources, however, may be consumed more rapidly than currently expected, or may be insufficient for our business needs for many reasons, including as a result of our operational cash needs, capital expenditures, and litigation related costs not covered by, or above the limits set forth in, our insurance.
We believe that our existing capital resources will be sufficient to meet our projected operating requirements for at least the next 12 months. Our available capital resources, however, may be consumed more rapidly than currently expected, or may be insufficient for our business needs for many reasons, including as a result of our operational cash needs or capital expenditures.
The impairment reduced the carrying value of the developed technology to its estimated fair value of $89.0 million as of the impairment date. 71 Table of Contents Goodwill. We test goodwill for impairment by reporting unit on an annual basis and in the interim if events and circumstances indicate that goodwill may be impaired.
As a result of this new information, we update our estimate of the amounts to be recognized for previously delivered tests. Goodwill. We test goodwill for impairment by reporting unit on an annual basis and in the interim if events and circumstances indicate that goodwill may be impaired.
We also continue to invest in clinical evidence development to support the growth of our existing products and launch of new products, such as FirstGene, Precise Liquid, and Precise molecular residual disease (MRD) which we expect will help us continue to grow.
In September 2025, we entered into a strategic collaboration with SOPHiA GENETICS S.A. to develop a global liquid biopsy companion diagnostic solution. We continue to invest in clinical evidence development to support the growth of our existing products and launch of new products, such as FirstGene and Precise MRD.
We develop and offer molecular tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care and lower health care costs.
Our tests assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where molecular insights can significantly improve patient care, support earlier detection, enable more precise treatment and contribute to lowering healthcare costs. Personalized molecular data and digital and virtual consumer trends are converging to transform traditional models of care.
We have the right to bill our customers upon the completion of performance obligations and thus do not record contract assets. 70 Table of Contents Significant judgments are required in determining the transaction price in connection with satisfying performance obligations under the revenue standard.
Significant judgments are required in determining the transaction price in connection with satisfying performance obligations under the revenue standard. In determining the transaction price, we include an estimate of the expected amount of consideration to be received.
Cost of Sales Years ended December 31, (in millions) 2024 2023 Change % Change Cost of revenue $ 252.2 $ 236.2 $ 16.0 7 % Cost of revenue as a % of revenue 30.1 % 31.4 % Cost of revenue for the year ended December 31, 2024 increased $16.0 million compared to the prior year due primarily to an increase in testing volumes in Pharmacogenomics, Prenatal and Hereditary Cancer. 66 Table of Contents Research and Development Expense Years ended December 31, (in millions) 2024 2023 Change % Change Research and development expense $ 113.4 $ 88.7 $ 24.7 28 % Research and development expense as a % of total revenue 13.5 % 11.8 % Research and development expense for the year ended December 31, 2024 increased by $24.7 million compared to the prior year primarily due to additional investments in new products and features including expanded screening for our existing Prenatal products and advancement in the development of our MRD test.
Cost of Revenue Years ended December 31, (in millions) 2025 2024 Change % Change Cost of revenue $ 247.9 $ 252.2 $ (4.3) (2) % Cost of revenue as a % of revenue 30.1 % 30.1 % Cost of revenue for the year ended December 31, 2025 decreased $4.3 million compared to the prior year due primarily to a reduction in the cost per test for the current period driven by reductions in the cost of laboratory reagents and supplies. 68 Table of Contents Research and Development Expense Years ended December 31, (in millions) 2025 2024 Change % Change Research and development expense $ 106.8 $ 113.4 $ (6.6) (6) % Research and development expense as a % of total revenue 13.0 % 13.5 % Research and development expense for the year ended December 31, 2025 decreased by $6.6 million compared to the prior year primarily due to a decrease in compensation related expenses.
Legal Settlements Years ended December 31, (in millions) 2024 2023 Change % Change Legal settlements $ (21.3) $ 112.8 $ (134.1) (119) % Legal settlements as a % of total revenue (2.5) % 15.0 % Legal settlements decreased by $134.1 million for the year ended December 31, 2024 compared to the prior year.
Legal Settlements Years ended December 31, (in millions) 2025 2024 Change % Change Legal settlements $ — $ (21.3) $ 21.3 (100) % Legal settlements as a % of total revenue — % (2.5) % Legal settlements for the year ended December 31, 2024 included the reversal of expense for a contingent payment related to the Ravgen settlement, payment of which was determined to no longer be probable in 2024.
Additionally, we corroborated the reasonableness of the estimated reporting unit fair values by reconciling them to our enterprise value and market capitalization. Income Taxes . Our income tax provision is based on income before taxes and is computed using the liability method in accordance with Accounting Standards Codification 740 – Income Taxes .
We will continue to monitor our intangible assets for any triggering events or other signs of impairment, which could result in impairment charges in the future. Income Taxes . Our income tax provision is based on income before taxes and is computed using the liability method in accordance with Accounting Standards Codification 740 – Income Taxes .
In the year ended December 31, 2024, based on updated information, we determined that the payment is no longer probable and reversed the expense related to the contingent payment. 67 Table of Contents Goodwill and Long-lived Asset Impairment Charges Years ended December 31, Change (in millions) 2024 2023 % Change Goodwill and long-lived asset impairment charges $ 56.8 $ — $ 56.8 — % Goodwill and long-lived asset impairment charges as a % of total revenue 6.8 % — % Goodwill and long-lived asset impairment charges for the year ended December 31, 2024 included $43.0 million of expense for the impairment of the developed technology intangible asset for our GeneSight test and $12.4 million of losses in connection with the sale of our EndoPredict business.
Goodwill and Long-lived Asset Impairment Charges Years ended December 31, Change (in millions) 2025 2024 % Change Goodwill and long-lived asset impairment charges $ 319.4 $ 56.8 $ 262.6 462 % Goodwill and long-lived asset impairment charges as a % of total revenue 38.7 % 6.8 % Goodwill and long-lived asset impairment charges for the year ended December 31, 2025 included primarily goodwill impairment charges of $234.7 million and intangible asset impairment charges of $82.0 million related to our Women's Health and Mental Health reporting units.
An estimate of transaction price does not include any estimated amount of variable consideration that is constrained. In addition, we consider all the information (historical, current, and forecast) that is reasonably available to identify possible consideration amounts. In determining the expected value, we consider the probability of the variable consideration for each possible scenario.
In addition, we consider all the information (historical, current, and forecast) that is reasonably available in determining the estimate of transaction price. We have significant experience with historical discount patterns and we use this experience to estimate transaction prices.
Inflationary costs have previously impacted our profitability and may continue to adversely affect our business, financial condition and results of operations. In addition, increased inflation has had, and may continue to have, an effect on interest rates.
If inflation were to increase, it may negatively impact our profitability and may adversely affect our business, financial condition and results of operations. In addition, higher inflationary pressures may contribute to higher interest rates, which could increase our borrowing costs or affect the terms and availability of future financing.
Sales and Marketing Expense Years ended December 31, (in millions) 2024 2023 Change % Change Sales and marketing expense $ 284.1 $ 289.2 $ (5.1) (2) % Sales and marketing expense as a % of total revenue 33.9 % 38.4 % Sales and marketing expense decreased $5.1 million for the year ended December 31, 2024 compared to the prior year primarily due to a decrease in compensation expense from a revised commission structure and a decrease in expense from sales events.
Sales and Marketing Expense Years ended December 31, (in millions) 2025 2024 Change % Change Sales and marketing expense $ 280.8 $ 284.1 $ (3.3) (1) % Sales and marketing expense as a % of total revenue 34.1 % 33.9 % Sales and marketing expenses for the year ended December 31, 2025 were relatively consistent with the expenses incurred in the prior year, reflecting stable operating activities across the business.
Our consolidated revenues consist primarily of sales of genetic tests through our wholly-owned subsidiaries.
We are committed to making molecular testing accessible and actionable for patients and providers while driving long-term growth and profitability. Our consolidated revenues consist primarily of sales of genetic tests through our wholly-owned subsidiaries.
Cash Flows from Financing Activities The increase in cash flows used in financing activities for the twelve months ended December 31, 2024 compared to cash flows provided by financing activities in the same period in the prior year was primarily due to proceeds of $117.6 million from the underwritten public offering and the initial borrowing on our line of credit of $40 million that occurred in the twelve months ended December 31, 2023, which did not reoccur during the twelve months ended December 31, 2024.
Cash Flows from Financing Activities Cash flows from financing activities increased $71.6 million for the twelve months ended December 31, 2025 compared to the prior year, primarily due to an increase of cash proceeds from our new Credit Facility, partially offset by the repayment of our prior ABL Facility, debt issuance costs related to the term loan, and release of cash held in escrow.
There were no corresponding impairment charges in the prior year.
There were no legal settlements in the year ended December 31, 2025.
Pharmacogenomics revenue increased $31.7 million compared to the prior year due primarily to an 11% increase in the average revenue per test, partially due to change in estimated revenue per test related to prior periods, and to a 10% increase in testing volume.
Prenatal revenue increased $9.2 million due to a 10% increase in average revenue per test, partially offset by a 4% decrease in volume primarily driven by a decline in SneakPeek volume. Hereditary Cancer revenue increased $7.9 million due to a 7% increase in volume, partially offset by a 5% decrease in average revenue per test.
We expect that Pharmacogenomics revenues in 2025 and thereafter will be negatively impacted by UnitedHealthcare's recent change in GeneSight test coverage under its commercial and individual exchange plans and certain managed Medicaid benefit plans. Prenatal revenues increased $25.8 million due primarily to a 10% increase in the average revenue per test and a 7% increase in testing volume.
The decrease in revenue per test is due to UnitedHealthcare's change in GeneSight test coverage under its commercial, individual exchange, and certain managed Medicaid benefit plans, and due to revenue recognized in the prior year for tests in which the performance obligation had been satisfied in a prior period.
Seasonal patterns were disrupted in previous years as a result of the COVID pandemic and certain other factors, but we believe pre-COVID seasonality impacted 2024, particularly in the third quarter. Additionally, operating results for the twelve months ended December 31, 2024 may not necessarily be indicative of results to be expected for any year. Components of Consolidated Operations Revenue .
While the Company continues to experience periodic fluctuations in quarterly revenues, these variations are increasingly influenced by other factors such as the timing of customer activity, reimbursement dynamics, and broader market conditions. Additionally, we believe operating results for the twelve months ended December 31, 2025 may not necessarily be indicative of results to be expected for any other year.
Cash Flows from Investing Activities The increase in cash flows used in investing activities for the twelve months ended December 31, 2024 compared to the cash flows provided by investing activities in the same period in the prior year was primarily due to the $96.2 million decrease in cash flows from maturities and sales of marketable investment securities compared to the prior year, partially offset by a $44.2 million decrease in capital expenditures in the current period in connection with the completion of the build-out of new facilities in the prior year and the $8.8 million received from the sale of our EndoPredict business in 2024.
The change in cash provided by operating activities was primarily driven by changes in working capital. Cash Flows from Investing Activities We used $15.5 million more cash for investing activities for the twelve months ended December 31, 2025 compared to the prior year.
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Our molecular tests provide insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease. Personalize molecular data and digital and virtual consumer trends are converging to transform traditional models of care.
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Our long-term growth str ategy is buil t on leveraging our differentiated strengths, including our reputation for trusted high-quality tests and customer service, and our established, extensive commercial reach in community medicine. Our strategy also leverages invest ments in science and innovation, technology-enabled operations, an enhanced customer experience, strong commercial execution, and scalable operations.
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Our focus is on innovation and growth in three key areas where we have specialized products, capabilities, and expertise: Oncology, Women's Health, and Pharmacogenomics. Our long-term growth strategy is built on investments in science and innovation, technology-enabled operations, an enhanced customer experience, strong commercial execution, and scalable operations.
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Our strategic intent is to accelerate profitable growth by focusing on (i) providing a comprehensive testing menu for the Cancer Care Continuum (CCC) market with a priority for high growth applications; (ii) growing our Prenatal Health and Mental Health revenues at or above market growth; and (iii) delivering sustained profitable growth through financial and operational discipline and leveraging our operating model.
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To drive continued growth, we plan to accelerate electronic medical records (EMR) integrations, expand our sales channels, including into large health systems, cross sell our portfolio of testing products to providers, enhance our testing products within medical guidelines, demonstrate our clinical differentiation and value compared to the standard of care, and optimize our revenue cycle processes.
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Under this strategy, we plan to leverage our strong scientific foundation, deep clinical partnerships, and technology-enabled capabilities to expand adoption of our testing portfolio and integrate our precision medicine solutions more deeply into clinical workflows across the Cancer Care Continuum, Prenatal Health, and Mental Health.
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For example, in June 2024, we launched the Universal Plus Panel to our Foresight Carrier Screen Test, which is an expanded carrier screening test.
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Cancer remains one of the most prevalent diseases, with more than two million new cases diagnosed, and more than eighteen million survivors, in the United States in 2025.
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For example, in early 2025, we plan to complete the transition of all of our laboratory activities to our next generation laboratory facilities, which we believe will improve the efficiency of our operations. We are committed to making molecular testing accessible and actionable for patients and providers while driving long-term growth and profitability.
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Myriad is a pioneer in DNA based cancer diagnostic testing, and a trusted leader in hereditary cancer testing across eleven of the most commonly occurring cancer types including breast, ovarian, colorectal, prostate, lung and skin.
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During the year ended December 31, 2024, we reported total revenue of $837.6 million, a net loss of $127.3 million, and basic and diluted loss per share of $1.41. 63 Table of Contents During the fourth quarter of 2024, UnitedHealthcare updated its medical policy for pharmacogenetic testing to no longer provide coverage for certain multi-gene panel pharmacogenetic tests, including our GeneSight test, under its commercial and individual exchange benefit plans and certain managed Medicaid plans.
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We are also a leader in cancer therapy selection with our Homologous Recombination Deficiency (HRD) test and are planning to strengthen our portfolio of comprehensive genomic profiling tests through product development and partnerships. We see molecular residual disease (MRD) testing as a significant opportunity for patient impact and revenue growth.
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The change took effect for commercial and individual exchange benefit plans on January 1, 2025, and is expected to take effect for impacted managed Medicaid plans during the first half of 2025. We anticipate that the change in UnitedHealthcare coverage will negatively impact our revenue, profitability, and cash flow in 2025 and thereafter.
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We believe Myriad’s ultra-sensitive Precise MRD offering, combined with our growing portfolio of other relevant diagnostic tests that are a common part of cancer care and, our commercial leadership in serving community medicine, will enable us to establish and grow a meaningful MRD business over the coming years. 64 Table of Contents As part of our Cancer Care Continuum strategy, we also plan to expand the number of biopharma partners we serve with services including biomarker identification and validation, companion diagnostic test development and regulatory registration, as well as companion diagnostic test commercialization.
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While we intend to continue our engagement with UnitedHealthcare regarding its decision to change its GeneSight coverage policy, there is no guarantee that our efforts will be successful or that our GeneSight test will be covered by UnitedHealthcare or other payers in the future.
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Complementing our own capabilities with partnerships that enable us to bring compelling solutions to market more quickly is an important part of our strategy.
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For additional information regarding the impact of UnitedHealthcare's change on goodwill in our Pharmacogenomics reporting unit and our business, please refer to Critical Accounting Estimates below and the risk factors " If the government and other third-party payors fail to provide coverage and adequate payment for our existing and future tests, if any, our revenue and prospects for profitability will be harmed " and " Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition " included in Part I, Item 1A, of this Annual Report on Form 10-K.
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In early 2025, we entered into a strategic collaboration with PATHOMIQ, Inc. pursuant to which we obtained exclusive U.S. licen sing rights to PATHOMIQ’s AI-enabled diagnostic platform, PATHOMIQ_PRAD, to enhance our oncology portfolio and offer AI-driven prognostic and predictive solutions for prostate cancer care.
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Business Updates and Financial Highlights During the year ended December 31, 2024, our significant business updates and financial highlights include the following: • Revenue growth of 11% year-over-year, driven by 23% growth in Pharmacogenomics, 17% growth in Prenatal and 11% growth in Hereditary Cancer. • Ranked among Best Large Workplaces in Health Care by Fortune and achieved a Great Place to Work ® Certification for 2024. • In February 2024, we acquired select assets from Intermountain Healthcare's Intermountain Precision Genomics (IPG) laboratory business, including the Precise Tumor test and the Precise Liquid test.
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In 2025, we completed the transition of our laboratory operations to our next-generation laboratory facilities, which are designed to enhance automation, reduce turnaround time, and improve cost efficiency across our testing portfolio. We believe these improvements, combined with our ongoing operational initiatives, position us to achieve greater scalability and reduce operating expenses as a percentage of revenue over time.
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IPG's laboratory operations were successfully integrated into our west Salt Lake City facility during the fourth quarter of 2024. • In May 2024, we announced the reorganization of our International operations, which included the sale of our EndoPredict business.
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During the year ended December 31, 2025, we reported total revenue of $824.5 million, a net loss of $365.9 million, and basic and diluted loss per share of $3.95. 65 Table of Contents Business Updates and Financial Highlights During the year ended December 31, 2025, our significant business updates and financial highlights include the following: • Revenue decreased 2% year-over-year to $824.5 million, which was driven in part by the discontinuation of coverage by UnitedHealthcare of GeneSight and the divestiture of the European EndoPredict business in the prior year.
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We have licensed the rights to continue to produce and sell EndoPredict as a laboratory developed test in the United States. • Announced a series of ongoing research collaborations to study the use of MRD testing in breast cancer using our Precise MRD test.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAn incremental change in the borrowing rate of 100 basis points would increase or decrease our annual interest expense by an immaterial amount based on our $40.5 million debt outstanding on our ABL Facility as of December 31, 2024. 73 Table of Contents
Biggest changeAn incremental change in the borrowing rate of 100 basis points would increase or decrease our annual interest expense by $1.3 million based on the Credit Facility balance of $125 million. 75 Table of Contents
While our expenses are predominantly denominated in U.S. dollars, approximately 8% of our revenues for the twelve months ended December 31, 2024 are denominated in other currencies, primarily in Japanese yen. A hypothetical 10% change in the value of the Japanese yen relative to the U.S. dollar would result in a 1% change in our revenues.
While our expenses are predominantly denominated in U.S. dollars, approximately 7% of our revenues for the twelve months ended December 31, 2025 are denominated in other currencies, primarily in Japanese yen. A hypothetical 10% change in the value of the Japanese yen relative to the U.S. dollar would result in a 1% change in our revenues.
We do not currently utilize hedging strategies to mitigate foreign currency risk. We are exposed to interest rate risk primarily through borrowings under our ABL Facility. Our ABL Facility has a variable interest rate based on the Prime Rate, the NYFRB Rate, or the Secured Overnight Financing Rate (SOFR).
We do not currently utilize hedging strategies to mitigate foreign currency risk. We are exposed to interest rate risk primarily through borrowings under our Credit Facility. Our Credit Facility has a variable interest rate based on the Secured Overnight Financing Rate (SOFR).

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