Myriad Study to Benefit Colaris - Analyst Blog
April 04 2012 - 7:15AM
Zacks
Myriad Genetics
(MYGN) recently made a presentation at a conference, which
concluded that proper diagnostic test for Lynch syndrome, a
hereditary form of colon cancer, should include the PMS2 gene.
This research finding should
benefit the company’s Colaris test, which identifies genetic
mutations in the MLH1, MSH2, MSH6, and PMS2 genes and assesses a
person's risk of developing colorectal and endometrial cancer. A
patient who tests positive with the Colaris test faces almost 82%
chance of developing colorectal cancer and up to about 71% chance
of developing endometrial cancer.
The study, using Myriad’s Colaris
test in 327 patients, found cancer causing mutations in the PMS2
gene in about 14% of patients with personal and family histories
suggestive of Lynch syndrome. Moreover, cancer causing mutations
were also found in the MSH2 (38%), MLH1 (30%), and MSH6 (18%)
genes.
With only about 7% penetration (in
a market with more than $450 million of annual market opportunity),
revenues from Colaris products recorded a substantial 56% upside
during the last reported quarter due to the inclusion of the PMS2
gene, increased demand and market share gain.
Although Bracanalysis is Myriad’s
flagship product, the company is trying to reduce its dependence on
it. To meet this objective, the company is currently focusing on
the companion diagnostic market and collaborating with several
pharmaceutical companies, the latest being with Cephalon, a
subsidiary of Teva Pharmaceuticals (TEVA).
Myriad has also made commendable
progress with respect to its expansion in Europe. The company’s
laboratory in Munich, Germany, which became operational since
January this year, is capable of generating $50 million in revenues
each year, over a period of next five years. With its headquarters
in Switzerland, the company’s task of hiring country managers for
the five major markets of Germany, France, Italy, Spain and
Switzerland is nearly complete. While reimbursements for
Bracanalysis, Colaris and Colaris AP have already been received in
these markets, Myriad is endeavoring to obtain reimbursement for
Prolaris as well.
However, European expansion and
pipeline development have pushed up operating expenses, fostering
pressure on margins. Over the long term, we are Neutral on Myriad.
The stock retains a Zacks # 3 Rank (Hold) in the short term.
MYRIAD GENETICS (MYGN): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis Report
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