Myriad Gets Rights to RAD51C Gene - Analyst Blog

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Myriad Genetics ( MYGN ), in order to further expand its product portfolio, obtained rights to the RAD51C gene. Studies have shown that mutations in the RAD51C gene are associated with an increased risk of hereditary breast and ovarian cancer.

RAD51C was originally identified as a vulnerable gene for hereditary breast and ovarian cancer by the German Consortium for Hereditary Breast and Ovarian cancers in collaboration with other scientists. The current agreement grants Myriad an exclusive, worldwide license, with co-exclusivity in Germany, to provide commercial testing for RAD51C.

Over the past few quarters, the company has been undertaking several steps to reduce dependence on Bracanalysis, its flagship product. With a focus on delivering new molecular diagnostic products, Myriad has decided to pursue internal developments, in-licensing of technologies and acquisitions to expand its business. In September 2011, the company entered into a deal with Crescendo Biosciences which in due course can complement its portfolio by adding autoimmune and inflammatory disease products. Over the recent past, the company has acquired RBM and in-licensed technologies from Chronix Biomedical and Melanoma Diagnostics. At present, the company has 13 products under development at various stages.

In breast cancer, Myriad is undertaking several strategies to expand the targeted patient population. Besides increasing penetration with triple negative breast cancer patients, the company is focusing on carcinoma in situ ("CIS"), a non-invasive form of breast cancer that occurs in roughly 62,000 patients each year.

Viewing the huge untapped potential in the CIS market, Genomic Health ( GHDX ), another player in the diagnostics space, launched Oncotype DX DCIS Score last month. This will enable physicians to better assess the risk of a particular patient, facilitating the selection of the appropriate treatment option.

Myriad has made a commedable progress with respect to its expansion in Europe. The company plans to generate revenues from Europe in January 2012 with the target of achieving $50 million in revenues each year within the next five years. However, the current uncertainties in Europe might come in the way of Myriad's expansion plans. European expansion and pipeline development have also pushed up operating expenses, which are keeping margins under pressure.

Myriad currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain our long-term Neutral recommendation on the stock.


 
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