Myriad Genetics, Inc. (NASDAQ:MYGN) Gets Downgraded
Myriad Genetics, Inc. (NASDAQ:MYGN)’s stock tumbled on Monday as more than 10.9 million shares exchanged hands against its 30 day average volume of 2.31 million shares. The stock closed at $20.79, losing almost 14% from its previous close. During the session, the stock also hit the 52 week low of $20.02 and its 52 week high is of $38.27. The stock is down 23.7% year to date. The news of rate cut by the Centers for Medicare and Medicaid Services for its key test followed by analysts’ downgrade plummeted the stock to its lowest value in almost two years.
The Rate Cut
The U.S. agency cut the reimbursement for Myriad Genetics, Inc. (NASDAQ:MYGN)’s key diagnostic test – BRCA breast and ovarian cancer test by almost 50% to $1,438.14. This move of rate cut could also be followed by commercial health insurers and in that case, Salt Lake City, Utah based molecular diagnostic company could suffer significant revenue loss.
The company said in a filing on Monday that the Centers for Medicare and Medicaid Services is going to hold a public comment period on the proposed lower rates through Jan. 27th. The company said that it will address concerns by participating in the public comment which might lead to revision to the rate. While new reimbursement rates will be applicable effective Jan. 1st, any revisions to the proposed rate would occur from April.
Bloomberg reports that Myriad Genetics, Inc. (NASDAQ:MYGN) enjoyed a monopoly in the U.S. markets until June for BRCA tests. Following the U.S. Supreme Court ruling that invalidated portion of its gene patents, companies like Quest Diagnostics Inc. (NYSE:DGX) and Ambry Genetics Corp. announced their intentions to enter the BRCA market. While that could be considered as the first blow, recent rate cut add to the same.
In the light of facts, equity research analysts at Mizuho Securities downgraded the stock from “buy” to “neutral”. While JMP Securities also downgraded the stock, Leerink Swann and Piper Jaffray cut their price targets.