MYGN Myriad Genetics Inc

Shares of Myriad Genetics Inc. (MYGN) surged 11.4% at yesterday’s market close following the company’s recent release of positive data on its Prolaris test – a 46-gene molecular diagnostic test – in the Journal of Urology. The Prolaris test correctly predicted those prostrate cancer patients who had the risk of biochemical recurrence (“BCR”) or metastatic disease following a radical prostrate surgery. The predictions were made based on biopsies conducted earlier on these patients. Notably, the Prolaris test has been evaluated in more than 5,000 patients across 11 clinical studies.

According to the company, this test, that helps to detect patients who are likely to fail surgery, is a great milestone in the field of prostate cancer treatment. While patients with a low score may need active surveillance, the ones with a high score signify aggressive cancer and may require more intensive treatments.

Myriad is currently targeting expansion of its pipeline with products for diverse indications including oncology, women’s health, urology, dermatology, autoimmune and inflammatory disease and neuroscience. To achieve this objective, the company has decided to pursue internal developments, in-licensing of technologies and acquisitions to expand its business. We are sanguine about these developments as some of the pipeline candidates look promising enough to cater to a billion-dollar market size.

Earlier this month, the company announced the acquisition of Crescendo Bioscience – an autoimmune diagnostics company. The product line of Crescendo is expected to complement Myriad’s portfolio by adding autoimmune and inflammatory disease products. Crescendo’s novel offering, Vectra DA that Myriad will gain from the takeover will allow the company to tap a promising market opportunity of $2.5 billion worldwide.

The commercialization of the unique myRisk test is another material upside as management expectations from the pan-cancer test are sky high. Moving forward, we consider Myriad’s HRD (Homologous Recombination Deficiency) test as a valuable asset for top-line growth given its potential to tap a widely unexplored market. The company’s increasing focus on the companion diagnostic market should work reasonably well to fuel growth. We look forward to the expansion of indications and derive comfort from the company’s plan to foray into the dermatology, autoimmune and neuroscience market in the future on the back of portfolio development.

Currently, the stock carries a Zacks Rank #3 (Hold). Better-placed stocks that are worth a look include Affymetrix Inc. (AFFX), Biogen Idec Inc. (BIIB) and Actelion Ltd. (ALIOF). While Affymetrix and Biogen Idec sport a Zacks Rank #1 (Strong Buy), Actelion bears a Zacks Rank #2 (Buy).

 
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