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Shares of Myriad Genetics Inc. slid Tuesday after a court overturned a group of patents on gene sequences linked to breast cancer and ovarian cancer, which Myriad uses in tests for those diseases.
Myriad Genetics sells a test for mutations on the two breast cancer predisposition genes, which are called BRCA1 and BRCA2, and says those mutations are connected to greatly increased risks of cancer. The company holds patents on several DNA sequences from the gene, but its patents were challenged a year ago in a lawsuit by the American Civil Liberties Union and other groups. On Monday, a U.S. District Court Judge ruled against the Myriad Genetics.
The Salt Lake City said Tuesday that the decision will not have much effect on its business. It said only a few of the patent claims supporting seven patents on its BRACAnalysis test were voided, and many other patent claims were not challenged. It also it holds 16 additional patents on the test.
Myriad Genetics plans to ask the Court of Appeals for the Federal Circuit to overturn the decision.
Its shares lost $1.37, or 5.5 percent, to $23.53 in midday trading. They fell as much as 7.3 percent earlier in the day.
Analysts said they do not believe the ruling will affect sales. However, they expect the case could remain in litigation for years.
Soleil Securities analyst Junaid Husain said 80 percent of Myriad Genetics' revenue comes from BRACAnalysis testing. The ruling allows rival companies to launch BRCA tests to compete with the BRACAnalysis test, Husain said. But he does not think any other companies will launch competing products based on the court's decision because of Myriad Genetics' other patents, and because the ruling could be reversed by a higher court.
He said Myriad will ask the U.S. Court of Appeals for the Federal Circuit to overturn the decision, and predicted the case will eventually reach the U.S. Supreme Court.
"Essentially, this case could be mired in years of legal wrangling," he wrote.