Ahead of the Bell: Myriad shares continue slide
Shares of Myriad Genetics slid again Friday morning before markets opened and a day after the Supreme Court gave the diagnostic test maker a partial victory in a battle over the validity of patents underlying its lucrative test for genes linked to high cancer risks.
Myriad, based in Salt Lake City, sells a popular test for the BRCA 1 and BRCA 2 genes linked to hereditary risk of breast and ovarian cancer — the only test currently available because of its patents. They were challenged by a scientists group, leading to the Supreme Court's review.
The court ruled that genes naturally found in the body cannot be patented, but that synthetically created genetic material, called complementary or cDNA, can be patented. Patents enable inventors to prevent others from making, using or selling a novel device or process they've created.
Myriad said the ruling will preserve its revenue from the tests, but other experts said it will open the door for competing tests and for scientists to do gene-related disease research without restraints.
Investor focus will now shift from the court case to a competitive landscape that already appears to be growing more intense, said Jefferies analyst Brandon Couillard. He noted that competitors like Bio-Reference Laboratories and Quest Diagnostics Inc. plan to provide alternative BRCA tests.
Shares of Myriad Genetics Inc. started dropping Thursday after the decision. They fell another 4.6 percent, or $1.47, to $30.54 Friday before markets opened.