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
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TEVA
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