Myriad rebounds after calling reimbursement cuts an error
Shares of Myriad Genetics (MYGN) are climbing after the company stated that two contractors working for the Centers for Medicare & Medicaid Services, or CMS, had announced incorrect reimbursement rates for the company's BRACAnalysis genetic screening tests. The tests determine whether women have a gene mutation that makes them more likely to develop breast and ovarian cancer. WHAT'S NEW: CMS' contractors yesterday announced that reimbursement payments for Myriad's BRACAnalysis tests for the rest of 2013 would be slashed by 48.2%. However, early this morning Myriad stated that it was told by the contractors that a clerical error had caused them to release incorrect reimbursement rates for Myriad's tests for the rest of 2013. The contractors said they would correct the error, and there would be no reimbursement change for the rest of this year, Myriad reported. ANALYST REACTION: In a note to investors, Piper Jaffray analyst William Quirk wrote that CMS' initial reimbursement rates for Myriad's BRACAnalysis tests were incorrect and will not drop. He recommended buying the stock on any weakness today. Research firm Ladenburg Thalmann upgraded Myriad to Buy from Neutral. The news about the CMS reimbursement rates removes an overhang on the stock, and the recent weakness in the shares have been overdone, the firm contended. It set a $28 price target on the shares. TODAY'S PRICE ACTION: In late morning trading, Myriad jumped $1.75, or 7.55, to $25.25, after selling off last yesterday.
Yeah. Unfortunately some damage has been made. However Piper Jaffray analyst William Quirk and Research firm Ladenburg Thalmann upgraded MYGN and provided upbeat comments. it will be moving at right direction.