Seeking Alpha

Myriad settles patent suit, catches upgrade, adds to gains

  • Myriad Genetics (MYGN +8.1%) has settled a patent suit against fellow diagnostic testing firm Gene by Gene. As part of the deal, Gene by Gene will stop selling diagnostic tests in North America (but not elsewhere) that "include analysis of the BRCA1 and/or BRCA2 genes as a standalone test or in conjunction with gene panels."
  • Gene by Gene will continue selling its whole genome/exome products in North America, as well as "custom array products that test variants for inherited Mendelian disorders."
  • Myriad has sued a slew of companies for allegedly infringing its BRCA1/BRCA2 gene testing IP.
  • Shares are adding to the gains it saw earlier this week in response to its FQ2 beat and the Crescendo Biosciences acquisition. Helping Myriad's cause: Credit Suisse has belatedly upgraded shares to Neutral.
Comments (3)
  • IPOChaser
    , contributor
    Comments (52) | Send Message
     
    IMO this should have a market cap of $4B plus. That would equate to a stock price of over $50 a share.
    7 Feb, 11:38 AM Reply Like
  • PSalerno
    , contributor
    Comments (3641) | Send Message
     
    To late Credit Suisse, I knew Myriad had a chance to enforce his patents, but litigation outcomes are never a sure thing.
    7 Feb, 11:42 AM Reply Like
  • Doug Miller
    , contributor
    Comments (43) | Send Message
     
    Investors seem to be almost exclusively focused on BRCA testing while completely ignoring MYGN's pipeline. Pushing Gene by Gene out of the US market will have minimal impact on MYGN's revenue. (As noted in the settlement, Feb of 2016 will pretty much mark the end of any patent coverage anyway). So, MYGN will be able to swat a few gnats away using the courts for a year or two. This has very little meaning for the long term prospects of the company.

     

    The next big event to watch for is Medicare reimbursement approval for Prolaris. MYGN is confident they will have this by June. This is a $400M market in the US. I am guessing (or hoping, at least), that once Medicare starts covering Prolaris this test will be ordered for every prostate biopsy with a Gleason score of 7 or less. (Which will be most of them). Putting myself in the head of the urologist, I think you would be taking a risk in not ordering the test. Since the biopsy has already been done, there's no further damage to inflict on the patient. And since Medicare is paying, there is little or no cost to the patient. MYGN will have no competition for at least a year. I read GHDX's conf call transcript (it was kind of sad, really). GHDX has what will become the competing test, but they are just hoping to complete some of the studies needed to seek Medicare reimbursement in 2014. They couldn't even guess at a time frame for seeking Medicare reimbursement for their test. MYGN recently presented the results of the inititial clinical use of their test over the past year. 52% of the time Prolaris predicted a different outcome than Gleason + PSA alone. Of the 52%, half the time Prolaris said the cancer was more aggressive than it looked, and half the time less aggressive than it looked. What responsible urologist is going to pass up getting this information at no cost to himself or the patient?
    7 Feb, 12:17 PM Reply Like
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